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HomeMy WebLinkAbout06-16-2020 Agendaanal HOME OF PELICAN ISLAND PUBLIC NOTICE — POLICE PENSION BOARD VIRTUAL MEETING June 16, 2020 The Police Pension Board will hold a regular quarter meeting Tuesday, June 16, 2020 at 10:00 a.m. The Meeting will be conducted by using Zoom technology. The Public can be provided the necessary connection information by calling City Hall at (772) 388-8226, should they wish to participate virtually. AGENDA A. CALL TO ORDER Chairperson B. ROLL CALL Chairperson C. VOTE TO EXCUSE ABSENT BOARD MEMBER(S) Chairperson D. APPROVAL OF MINUTES: 1. April 24, 2020 Regular Quarterly Meeting Chairperson E. OLD BUSINESS 1. Approval of Payments: Ken Killgore, Plan Administrator a. Foster and Foster — Reports and Experience Study $ 20,663.00 b. Foster and Foster — State Requirements $ 7,301.00 c. Renaissance — January/March Fixed Income $ 1,332.50 d. Boston Partners — January/March Fixed Income $ 1,807.40 e. Fiera Capital — January/March Equities $ 1,258.73 f. Brookfield Public Securities Group - January/March $ 346.77 g. Morgan Stanley Consulting — January/March $ 3,375.00 h. Klausner, Kaufinan, Jensen & Levinson — April/May $ 2,390.00 i. City of Sebastian — January/June Administration $ 12,000.00 j. Salem Trust — January/March $ 5,515.00 2. Salem Trust Custodial Fees and Organizational Changes Mindy Johnson, Salem Trust 3. Cyber Insurance and Contract Amendments Ken Killgore, Plan Administrator 4. Formal Approval of Summary Plan Description Ken Killgore, Plan Administrator 5. Formal Approval of Investment Policy Goals and Guidelines Ken Killgore, Plan Administrator 6. Formal Approval of Operating Rules Ken Killgore, Plan Administrator F. PUBLIC INPUT Chairperson 1. The Public can submit questions and or comments to the Plan Administrator's email at kkill ore ,citvofsebastian.org. Any such questions or comments will be read aloud during this time. G. NEW BUSINESS 1. Report from Investment Monitor/Continue Discussion on Manager Search 2. Report from Investment Manager — Highland Capital H. LEGAL UPDATES — Klausner, Kaufman, Jensen & Levinson 1. Proposed City Ordinance Amending the Plan for New IRS Rules 2. COVID 19 Message — Extension of Virtual Meetings Updates #4 & #5 3. Families First Coronavirus Response Act 4. Other Legal Matters I. BOARD MEMBER REPORTS AND COMMENTS J. PLAN ADMINISTRATOR REPORTS AND COMMENTS 1. Review of Administrative Expense 2. Review of Annual Calendar of Board Activities a. Select of Board Chairperson and Secretary (every two years) a. Other Administrative Matters K. NEXT SCHEDULED OUARTERLY MEETING: September 15, 2020 ADJOURN Scott Owens, Morgan Stanley Todd Wishnia, Highland Capital Bonni S. Jensen, Board Attorney Chairperson Ken Killgore, Plan Administrator Chairperson Please note: In accordance with Florida Statue 286.0105: any person who desires to appeal any decision at this meeting will need a record of the proceedings and for this purpose may need to ensure that a verbatim record of the proceedings is made which includes the testimony and evidence upon which the appeal is based. In accordance with Florida Statute 286.26: Persons with disabilities needing assistance to participate in any of these proceedings should contact the Administrative Services Department at least 48 hours prior to the meeting at kkillgoreaa,cityofsebastian.org or telephone 772-388-8205. CITY OF SEBASTIAN POLICE PENSION BOARD MINUTES OF REGULAR QUARTERLY MEETING APRIL 24, 2020 Call to Order -- Chairman Gillette called the meeting to order at 10:00 a.m. II. Roll Call Present (via Zoom technoloav ) Board Members: Jason Gillette Paul Williamson Tim Wood Albert lovino Also Present (via Zoom technoloov) Bonni Jensen, Klausner, Kaufman, Jensen & Levinson, Attorney for the Board of Trustees Ken Killgore, Plan Administrator Cynthia Watson, Human Resources Manager Andy Mcllvaine, Morgan Stanley Scott Owens, Morgan Stanley Janet Graham, Technical Writer III. Vote to Excuse Absent Board Member -- None IV. Aooroval of Minutes -- Regular Meeting of December 10, 2019 Chairman Gillette asked if there were any changes or corrections to the Minutes of December 10, 2019 as presented. Mr. Killgore stated that on Page 4 A-3 where it states quarterly report, it should be the annual report from the actuary. Then on Page 4 A-6, it should read that we do have provisions for every liability. There being no further changes, Chairman Gillette called for a Motion to accept the Minutes as written. Motion to accept the Minutes as presented was made by Mr. lovino, seconded by Mr. Williamson, and approved unanimously via voice vote. V. Old Business A. Approval of Payments -- Ken Killgore, Plan Administrator 1. Salem Trust -- October/December $ 6,960.00 2. Highland Capital -- October/December Fixed Income 2,919.16 3. Highland Capital -- January/March Fixed Income 2,996.85 POLICE PENSION BOARD PAGE 2 MINUTES OF REGULAR MEETING OF APRIL 24, 2020 A. Approval of Payments (Continued) 4. Highland Capital -- October/December Equities 10,582.40 5. Highland Capital -- January/March Equities 8,187.36 6. Boston Partners -- October/December 2,194.30 7. Fiera Capital -- October/December 1,627.93 8. Renaissance -- October/December 1,862.06 9. Brookfield Public Securities Group -- Oct./Dec. 784.20 10. Morgan Stanley Consulting -- October/December 3,375.00 11. Klausner, Kaufman, Jensen & Levinson -- Nov./Dec. 3,841.25 12. Klausner, Kaufman, Jensen & Levinson -- Jan./Feb. 1,032.50 13. Klausner, Kaufman, Jensen & Levinson -- March 1,227.50 14. City of Sebastian -- Minutes Preparation for December 162.00 Mr. Killgore reviewed additional invoices he has received as follows: 1. Foster & Foster $20,663.00 2. Renaissance 1,332.50 3. Boston Partners 1,807.40 4. Fiera Capital 1,258.73 5. Graystone Consulting These will all be reported on the agenda for the next meeting. Motion to approve the payments as listed above was made by Mr. Williamson, seconded by Mr. Wood, and approved unanimously via voice vote. VI. Public Input -- None VII. New Business A. Adoption of Administrative Policy Governing the Use of Audio -Video Conferencing of Teleconferencing to Conduct Virtual Public Police Pension Board Meetings Ms. Jensen reviewed that the governor has issued an executive order that will allow us to conduct meetings in a virtual setting. This order is tied to the governor's declaration of an emergency here in Florida. The program that has been established via Zoom or by phone allows for participation by the public in all meetings. She stated that there must be adherence to the Sunshine Law, which has been done. Minutes are being taken by the �)-I-a POLICE PENSION BOARD PAGE 3 MINUTES OF REGULAR MEETING OF APRIL 24, 2020 Recording Clerk. Those Minutes will then be posted for public inspection. This administrative policy will remain in effect until May 8, 2020 unless the declaration of emergency is extended by the governor. Mr. lovino inquired whether this situation will also be in effect during hurricanes or other emergencies. Ms. Jensen stated this declaration is only applicable to this particular situation requiring social distancing. Ms. Jensen asked for the Board adopt the policy for the virtual meetings. A motion adopting the virtual meeting policy was made by Mr. Williamson, seconded by Mr. lovino, and approved unanimously via voice vote. Mr. Killgore will put the motion in writing and Chairman Gillette will sign it. B. Report from Investment Monitor Mr. Owens discussed the situation that is happening in the market. He reviewed that there has never been a time in history when a government has shut down its own economy. Never in history has the market fallen so far so fast and then rebounded in the same manner. Never in history has a government put $3 trillion to work so quickly. He pointed out that this was caused not by an economic crisis but by a health-care crisis. The volatility that has been occurring in the market has been brought on by conditions outside of the market. He opined that in 12 to 18 months from now there will be new highs occurring in the market. He reviewed how the first quarter earnings are going to look good because of the run on certain products and services during that quarter. He is of the opinion that the second quarter will be a much different picture because there will not be the demand for those same products and services, and the positive impact on the first quarter will have a negative impact on the second quarter. He suggests that the negative impact on the market will be astonishing until the economy begins to open up again. He stated it will probably be a very rocky road for a while. He is of the opinion that when people begin getting back to work, the stimulus that was put forth by the government will stimulate growth in the economy. Mr. Killgore asked regarding the values of the pension's real estate investments. Mr. Owens stated real estate has not been affected as much as other markets. Ms. Jensen stated she has read some articles that state that probably sometime around the middle of May problems with real estate, such as businesses being able to pay their rent, will ®-[--7 POLICE PENSION BOARD PAGE 4 MINUTES OF REGULAR MEETING OF APRIL 24, 2020 begin to occur. Mr. Owens stated that real estate is going to be better than equities for some time going forward. Mr. Mcllvaine added that, since the technology is now being widely used because of the virus that allows employees to work from home, that will affect companies' decisions in the future as to how much space they really need to lease, which in turn will affect the commercial real estate market. Mr. Owens reviewed the impact of the health-care crisis and how it has caused so much volatility in the market. This will greatly affect the long-term average this year. Adding to this fact is the price war on oil between Saudi Arabia and Russia which has caused the price of oil to drop significantly. Mr. Mcllvaine reviewed the portfolio in general and how it performed thus far this year. The portfolio is at $14 million, which is nearly double what it was at the beginning in 2011. He also reviewed how each manager performed this quarter. Highland has underperformed as has Renaissance. This has been a continuing situation, and he stated it is time to take a hard look at those two managers. Mr. Owens reviewed the Asset Allocation Report, which is a new format, and he pointed out that this report makes it much easier to see how the portfolio is performing. Mr. Mcllvaine went on to review that every manager is within their range, and it is within the investment policy statement. Presently, it is recommended that no changes be made at this time. He stated it is important, since the markets are so tumultuous right now, to not overweight any one sector. He reviewed each manager individually. Highland large -cap growth has underperformed for some time in both up and down markets. Mr. Owens suggested that a search be done in the near future for a different type of manager. Boston Partners was then addressed. Mr. Mcllvaine reviewed that they have underperformed in both up and down markets. His firm is not making any recommendations regarding Boston Partners right now, but they will keep a close eye on Boston. Renaissance has also taken on more risk, and he suggested that a search be done regarding this manager. Mr. Williamson asked that Mr. Mcllvaine explain for the newer Board members what the term "passive" means in the context of market activity.. Mr. Mcllvaine then went on to explain what that term means as well as a few other terms that are used frequently. After much discussion among the Board members and Mr. Mcllvaine and Ms. Jensen, it was the consensus of the Board that a search be instituted regarding Highland and lb--I-L, POLICE PENSION BOARD PAGE 5 MINUTES OF REGULAR MEETING OF APRIL 24, 2020 Renaissance. Ms. Jensen suggested that follow-up on this matter could be addressed in a Zoom meeting if needed in the future. Mr. Williamson asked Mr. Mcllvaine if his firm has studied any kind of rebalancing if the markets take another deep dip. Mr. Mcllvaine stated that is not something that is being considered presently. He recommends not making any large changes as long as the markets are in so much flux. C. Legal Updates -- Klausner, Kaufman, Jensen & Levinson • Ms. Jensen covered the IRS changes regarding the allowable mileage rate, which is now 57.5 cents as opposed to 58 cents. The Secure Act passed, and she will be presenting a suggested amendment to the pension plan. There is also a change from the required minimum distribution age from 70 1/2 to 72. Her firm is also recommending that this board track the IRS changes and then have them added to this plan. • The pieces of legislation that were pending in the State Legislature did not pass. Thus, there was nothing that was significantly impactful to this plan. She is not aware of any public sector law changes, such as the Sunshine Law. The last state legislative session allowed for remote notarization. As of January 1, remote notarization was allowed. Basically, notarization can be done through an application such as Zoom, where the transaction will be recorded. A signature of someone who is not in the State of Florida can now be notarized, and the witnesses can also be in another State. That procedure will require a verification process. This means that this plan's forms will have to be changed to reflect this new notarization process. She also reviewed that Form 1s are due on July 1st. She stated that she has received questions about signing forms while this social isolation order is in effect. She offered to help work this out if any signatures are needed in this manner. • Regarding the CARES Act, there were some pension changes that occurred in this Act. These are not particularly impactful to this plan, but she provided an overview of this matter in case any members of the plan ask questions. There is a provision that allows for a $100,000.00 distribution from a defined contribution kind of program. For example, the DROP plan, if there were someone who wanted to exit the DROP plan and needed to take out $100,000.00 in cash, not roll it over to some other kind of tax shelter entity, that can be taken without an early retirement penalty. So it is not subject to the 10% penalty. It can, however, be treated as a rollover even if they take it in cash, because they have three years to put that back into a tax shelter. If they prefer to take the cash in one sum and not roll it over, they can divide it up into three years for purposes of income tax payments. She POLICE PENSION BOARD MINUTES OF REGULAR MEETING OF APRIL 24, 2020 PAGE 6 does not think that any changes need to be made in this pension plan, but it will be recorded on the 1099R. • There are some changes that are being made to loans. There are also some exemptions that are required for minimum distributions, but that does not apply to governmental pension plans. • Her firm is part of a group working with the governor to try and get some relief for municipalities in making their contributions into pension plans. In recognition that tax revenues may be down, there will probably be a return that is less than the actuarial assumption, so probably the plan's contributions are going to go up. Mr. Killgore asked Ms. Jensen to address the summary plan description and the operating rules. That subject is not on this agenda, but they are still to be finalized. Ms. Jensen stated she had sent the summary plan description to Mr. Killgore at the end of the year. The changes are pretty limited, basically including the alimony issue that was discussed last year. The changes with the rules and regulations have to do with the time periods for appeals, etc. She will address this in the longer format. Vill. Board Members Retaorts and Comments -- None IX. Plan Administrator Reports and Comments Mr. Killgore stated the next meeting will be on June 16, 2020 barring any new developments or need to call another meeting. He stated, if any of the Board members knows anyone who would serve as a Board member, he would welcome suggestions. Mr. lovino inquired whether, when a prospective board member is not voted in by City Council, is there a restriction on if and when that person can reapply. Mr. Killgore stated he is not aware of any restrictions. X. Next Scheduled Quarteriv Meeting -- June 16, 2020 XI. Adjournment Chairman Gillette called for any further business adjourned at 11:42 a.m. By: Jason Gillette 19 Hearing none, the meeting was rookfield City of Sebastian Police Officers Retirement System 3040002617 1225 Main Street Sebastian, FL 32958 ww— SUMMARY FOR INVESTMENT MANAGEMENT SERVICES Invoice Date f 04/29/2020 Invoice Number 120200331-350-A Billing Period 01/01/2020 to 03/31/2020 Billing Portfolios SEBASTIAN - City of Sebastian Police Officers Retirement System Total Aunt Due 1 $346.77 * See attached worksheet for calculation details �34G17 PAYMENT DUE UPON RECEIPT PLEASE INCLUDE INVOICE # WITH REMIT PAYMENT JPMorgan Chase Bank, NA Bank Account # 907-153925265 ABA # 021000021 Account Name Brookfield Public Securities Group LLC Should you have any questions regarding this invoice, please email BPSGaccountsreceivable@brookfield.com C ' Page 1 of 2 pril 22, 2020 *745-070 PEPSDC590000018* CITY OF SEBASTIAN POLICE ATTN: KENNETH KILLGORE 1225 MAIN ST. SEBASTIAN FL 32958 Graystone Consulting - A business of Morgan Stanley Invoice Number: 10129920113 Morgan Stanley Financial Advisor www.morganstanley.com IMPORTANT NOTICE INVESTMENT ADVISORY FEE PAYMENT REQUIRED ACTION REQUIRED — PLEASE REMIT PAYMENT IN THE ENCLOSED BUSINESS REPLY ENVELOPE We value you as a client and thank you for the opportunity to serve your investment needs. Please see below for the investment advisory fee(s) due. ACCOUNT CLIENT NAME TOTAL FEE AMOUNT 745-038962 CITY OF SEBASTIAN POLICE $3,375.00 Total Fee: $3,375.00 Prior Balance: $3,375.00 Net Amount: $6,750.00 For additional details please see Invoice Detail and Remittance Instructions on pages to follow. f� 3, 37�eo y�ay�a° ao Iof5 Investments and services offered tbrougb Morgan Stanley Smitb Barney LLC. Member SIPC. Graystone Consulting is a business of Morgan Stanley. DVISORY INVOICE DETAILS Account: 745-038962 Billing Period Number of Days Hard Dollar Fee Fee Amount Graystone Consulting - A business of Morgan Stanley Invoice Number: 10129920113 01/01/2020 — 03/31/2020 91 $13, 500.00 $3,375.00 3of5 C-13-x Investments and services offered through Morgan Stanley Smitb Barney LLC. Member SIPC. Graystone Consulting is a business of Morgan Stanley. EMITTANCE INSTRUCTIONS Graystone Consulting - A business of Morgan Stanley Invoice Number: 10129920113 Payment Due: 5/22/2020 Please return payment using this page and include it with your check in the enclosed business reply envelope. Please note that cash payments cannot be accepted —wire and check information are below. If you have any questions, please contact your Financial Advisor. Account 745-038962 Total Fee: Prior Balance: Net Amount: Total Fee Amount $3,375.00 $3,375.00 $3,375.00 $6,750.00 By Wire Bank Name: Citibank, New York ABA:021000089 For Benefit Of Morgan Stanley & Co. Incorporated Beneficiary Account: 40611172 For Further Credit to: 980000163 Ref: Invoice 0101299 By Check Morgan Stanley Global Banking Operations ATTN: Advisory Fee Billing 1300 Thames Street Wharf, 4th Floor Baltimore, MD 21231-9907 Ref: Invoice 10129920113 5of5 Investments and services offered tbrougb Morgan Stanley Smitb Barney LLC. Member SIPC. Graystone Consulting is a business of Morgan Stanley. E,— 1 -3 lausner, Kaufinan, Jensen & Levinson A Partnership of Professional Associations Attorneys At Law 7080 N.W. 4th Street Plantation, Florida 33317 Tel. (954) 916-1202 www.klausnerkaufman.com Fax (954) 916-1232 Tax I.D.: 45-4083636 SEBASTIAN POLICE OFFICERS' RETIREMENT SYSTEM May 31, 2020 Aft KEN KILLGORE Bill # 26154 1225 MAIN STREET SEBASTIAN, FL 32958 CLIENT: SEBASTIAN POLICE OFFICERS' RETIREMENT SYSTEM ' 170042 MATTER: SEBASTIAN POLICE OFFICERS' RETIREMENT SYSTEM :170042 Professional Fees Date Attorney Description Hours Amount 05/01/20 BSJ REVIEW AND REVISE IRS ORDINANCE; 0.50 212.50 EMAIL TO KEN KILLGORE 05/03/20 BSJ REVIEW AND RESPOND TO EMAIL 0.50 212.50 FROM ANN-MARIE FRASER REGARDING FIERA CAPITAL AGREEMENTADDENDUM; DRAFT 119.0701 LANGAUGE 05/13/20 BSJ REVIEW ARTICLE REGARDING 0.10 42.50 MANHATTAN OFFICES; EMAIL TO SCOTT OWENS Total for Services 1.10 $467.50 CURRENT BILL TOTAL AMOUNT DUE $ 467.60 Past Due Balance AMOUNT DUE 1,922.50 $2,390.00 lausner, Kaufman, Jensen & Levinson A Partnership of Professional Associations Attorneys At Law 7080 N.W. 4th Street Plantation, Florida 33317 Tel. (954) 916-1202 www.kiausnerkaufman.com Fax (954) 916-1232 Tax I.D.: 454083636 SEBASTIAN POLICE OFFICERS' RETIREMENT SYSTEM April 30, 2020 Attn: KEN KILLGORE Bill # 25955 1225 MAIN STREET SEBASTIAN, FL 32958 CLIENT: SEBASTIAN POLICE OFFICERS' RETIREMENT SYSTEM :170042 MATTER: SEBASTIAN POLICE OFFICERS' RETIREMENT SYSTEM :170042 Professional Fees Date Attorney Description . Hours Amount 04/01/20 BSJ REVIEW EMAIL FROM SALEM TRUST 0.10 42.50 REGARDING STANDING REBALANCE 04/06/20 BSJ REVIEW PROPOSED CHANGES TO IPG 0.40 170.00 04/15/20 BSJ REVIEW CARES ACT; DRAFT MEMO 0.10 42.50 04/17/20 PARA REVIEW OF 4/16 EMAIL FROM K. 0.10 12.50 KILGORE ENCLOSING APRIL 28 AGENDA; REVIEW AGENDA 04/20/20 CW DRAFT IRS ORDINANCE. 1.00 425.00 04/21/20 BSJ REVIEW EMAIL FROM 0.10 42.50 INTERCONTINENTAL REGARDING COVID 19 EFFECTS ON PORTFOLIO 04/23/20 BSJ PREPARE FOR MEETING; REVIEW 0.50 212.50 AGENDAAND MEETING BACK UP, INCLUDING MINUTES OF LAST MEETING 04/24/20 BSJ ATTEND MEETING VIA ZOOM 2.00 850.00 04/24/20 PARA PREPARATION OF MEETING 1.00 125.00 MATERIALS FOR UPCOMING MEETING. Total for Services 5.30 $1,922.50 Continued .. . C-i� CM ok HOME OF PELICAN ISLAND City of Sebastian 1225 Main Street Sebastian, Florida 32958 INVOICE TO: Sebastian Police Pension Trust Fund INVOICE: 1225 Main Street Date: 6/5/2020 (Sebastian, FL 32958 Amount: $12,000.00 C AMOUNT DESCRIPTION DUE Agreement With City of Sebastian Dated June 14, 2017 for Plan Administrator Services for January, February, March, April, May and June 2020. $12,000.00 PAYMENT DUE UPON RECEIPT. PLEASE RETURN COPY OF INVOICE WITH PAYMENT THANK YOU. TOTAL AMOUNT DUE $12,000.00 Remit To: City of Sebastian - Attention Ken Killgore 1225 Main Street Sebastian, Florida 32958 Account Code 001501-349620 1 ity of Sebastian Debbie Krueger 1225 Main Street Sebastian, FL 32958 Sr SALEM TRUST Fee Advice for Period January 1, 2020 Detail of Calculation: Flat Fee $500 for 6 additional accounts April 6, 2020 M70987 Sebastian Police to March 31, 2020 Annual Fee Quarterly Fee $5,000.00 $1,250.00 $3,000.00 $750.00 $5.00 Security Transactions Current Period Year To Date 9/30/2019 843 843 $5.00 12/31 /2019 992 1835 3/31 /2020 703 2538 $5.00 6/30/2020 (300 included in annual fee) $3,515.00 Total $5,515.00 Total Amount Due $5,515.00 These fees will automatically be charged to your account. If you have any questions, please contact Mindy Johnson at 813.288.4990 HOLLYWOOD TAMPA 1715 N. WESTSHORE BLVD., SUITE 750 TAMPA, FL 33607 TEL (877) 382-5268 FAX (813)301-1295 ' www.sntemtrust.coni 1. J POLICE PENSION BOARD PAGE 8 MINUTES OF REGULAR MEETING OF DECEMBER 10, 2019 Ms. Jensen stated that regarding the Summary Plan Description, she was delinquent in getting the paperwork to Mr. Killgore- She suggested this be added to the agendc for the next meeting. That was agreed to by the Board tnembers. ii. Other Legal Matters Ms. Jensen has included in the Board's packet a memo about the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA). A number of pension plans have asked questions about individuals who are deployed and individuals who are serving on reserve duty. Ms. Jensen stated the most important thing for this Pension Plan is to make sure that it continues people who are serving on active duty military services when they leave from employment, that the Plan continues to report them to the actuary, and that the actuary and the administrator continue to know that they belong to the Pension Plan. She stated there are statutes of the State of Florida that contain requirements that, if people leave from their employment and go to military service, they are entitled to five years of service for free. They don't have to make any contributions into the Pension Plan. So it will be necessary to follow those employees and recognize that we have a potential liability for those individuals. Ms. Jensen reviewed the other item in the memo is related to employment and the different things that must be done for people who are out on that military service -- making sure that they get the raises and/or promotions that they were entitled to during the time they're gone. Vill. Board Member Reports and Comments -- None IX. Plan Administrator Reports and Comments A. Review of Administrative Expenses Mr. Killgore has provided and reviewed the report on the administrative expenses. There were no questions or comments from the Board. B. Review of Annual Calendar of Board Activities Mr. Killgore provided a report on the Board's activities scheduled for December. He stated he is complying with everything except possibly updating the investment policy and allocation strategy. He will be working on getting that accomplished. 6-1 CITY OF SEBASTIAN POLICE OFFICERS' RETIREMENT SYSTEM SUMMARY PLAN DESCRIPTION Dee;vb.-j 1, 2f:,1 }.,r December 1, 2019 IS YOUR BENEFICIARY FORM CURRENT? IN THE EVENT YOU DIE, YOUR BENEFIT OR CONTRIBUTIONS WILL BE DISTRIBUTED TO THE PERSON OR PERSONS DESIGNATED BY NAME ON THE BENEFICIARY FORM ON FILE WITH THE PENSION PLAN. NO PROVISION IN YOUR LAST WILL AND TESTAMENT WILL CHANGE THIS SELECTION. PLEASE BE SURE THAT YOURBENEFICIARYFORMDESIGNATESTHEPERSONORPERS ONSYOUINTENDTORECEIVE YOUR BENEFITS AND THAT YOU REVIEW THIS CHOICE IN THE EVENT OF A MAJOR LIFE CHANGE SUCH AS A DIVORCE OR THE DEATH OF YOUR BENEFICIARY. {00140513.DOCX;1 } _ �— CITY OF SEBASTIAN POLICE OFFICERS' RETIREMENT SYSTEM SUMMARY PLAN DESCRIPTION INTRODUCTION The Board of Trustees of the City of Sebastian Police Officers' Retirement System LLhe "Pl is pleased to present this booklet which briefly explains the provisions of your Ppolice OOfficers' Pension Plan. As a participant in the PjAn Ftind, you are included in a program of benefits to help you meet your financial needs at retirement, or in the event of disability or death. This booklet can assist you in preparing for your retirement and financial future. If you need further information on any of the topics presented in this booklet, please contact any member of the Board of Trustees fthe "Board"I. They will either answer questions you might have to help you understand your benefits or otherwise get you an answer to your questions. We urge you to read and understand this booklet in order to become familiar with the benefits of the pPlan and how they contribute to your financial security and how they will enrich your retirement years. The information presented is only a summary of the pemrrn. F,ra "Plana as provided in the ordinances of the City of Sebastian. If there are any conflicts between the information in this booklet and the ordinances of the City of Sebastian, the ordinances shall govern. This summary has been uadAted thrpugh Ordin,2nCe P-) 7-93. The provisions of this Summary Plan Description shall not constitute a contract between the Mmember and the Board of Trustees. The pPlan shall be administered in accordance with state and federal law, notwithstanding any provisions in this booklet or ordinances to the contrary. A copy of the ordinance establishing the Plan can be obtained .online at www.municode.com or from the City Clerk's office, which is located at 1225 Main Street, Sebastian, Florida, 32958. Chairman, board o1 1 rustees, Uity of Sebastian Police Officers' Retirement System Date {00140513.DOCX;1 } 1. BOARD OF TRUSTEES AND PLAN ADMINISTRATMN A. Administration. (1) The City of Sebastian Police Officers' Retirement System is a defined benefit pension plan administered by a Board of Trustees which acts as the administrator of the Plan. The Board consists of 5 Trustees, 2 of whom shall be legal residents of the City who are appointed by the City Council, 2 of whom are M-members of the PlanSystern who are elected by a majority of the Ppolice 9officers who are Mmembers of the 1PLan&y4em and a fifth Trustee who is chosen by a majority of the first 4 Trustees. Each Trustee serves a four year term. (2) DROP participants can be elected as but not vote for elected tTrustees. B. The names and addresses ofthe current Trustees, Plan Administrator and Plan Custodian are attached to this Summary Plan Description as Exhibit "A". The Chairman of the Board is designated as agent for the service of legal process. 2. E,iGIBILITY_y_QR PLANMEMBERSHIP Each person employed by the City Police Department as a full-time Ppolice 0-officer becomes a member of the Plan Sy4em as a condition of his employment. All Ppolice 86fficers are therefore eligible for pElan benefits as provided for in the pElan document and by applicable law. 3. PLAN BENEFITS All claims for benefits under the Plan Syslem shall be made in writing to the Board. A. Normal Retirement Elieibilitv. You are eligible for retirement upon the attainment of age 55 and the completion of 10 years of eCfed ed sService or the attainment of age 52 and the completion of 25 years of eCfedi4ed sService. B. Amount of Normal Retirement Benefits. The amount of the normal retirement benefit is based on your eCreditesService and eAverage €Final eCompensation: "Credited Service" is generally your period of employment as a Ppolice 8officer in the Ppolice Ddepartment measured in years and parts of years. Credited sService will include credit for up to fn�-e 5 years for a break in employment for military service, pursuant to conditions provided for under state or federal law, provided that you are reemployed within 1 year of discharge under honorable conditions. Additional eCredited sService time may also be available (See subsection M. below). "Average Final Compensation" is 1/12 of your average sSalary of the 5 best years of the last 10 years of eC__r-e44edsService prior to your termination, retirement or death. A year is defined as 12 consecutive months. "Salary" means the total compensation for services rendered to the eCity as a police officer reportable on the member's W-2 form plus all tax deferred, tax sheltered, or tax exempt items of income derived from elective employee payroll deductions or sSalary reductions but excluding accrued sick leave and vacation pay. For service earned on or after July 1, 2011, Salary shall not include more than 300 hours of overtime per calendar year. Provided however, in any event, payments for overtime in excess of 300 hours per year accrued as of July 1, 2011 and attributable to service earned prior to the July 1, 2011, may still be included in Salary for pension purposes even if the payment is not actually made until on or after July 1, 2011. 100140513.DOCX;1 } -3- , In any event, with respect to unused sick leave and unused annual leave accrued prior to July 1, 2011, Salary will include the lesser of the amount of sick or annual leave time accrued on July 1, 2011 or September 6, 2013, whichever is less. Should the sick leave or the annual leave accruals decrease below the capped amount, accruals used for the pension calculation shall not increase and the lower accrual amount will be used in the pension calculation formula based on the rate of pay in effect on July 1, 2011. If you were hired rid or to October 1, 2011 and retire on or after your normal retirement date the normal retirement benefit is calculated by multiplying 3% times years of oCr-edited sService times your -aAverage €Final -&Compensation. If you were hired on or after October 1, 2011 and retire on or after your normal retirement date the normal retirement benefit is calculated by multiplying 2% times years of eCredited -&Service times your aAverage #Final -&Compensation for the years of eCredited -&Service beginning on or after April 1, 2012 and ending October 1, 2016 and by multiplying Ao times years of eCredited sService times your uAverage €_Final pCompensation for all eCredited -&Service before April 1, 2012 and after October 1, 2016. Normal and early retirement payments will commence on the first day of the month coincident with or next following your last day of employment. Early retirees may defer the commencement of benefits. The benefit is paid to you for your life, but you or your beneficiary shall receive at least 120 monthly benefit payments in any event. Each vested Plan Mmember shall be entitled, at the Fuiid Plan's expense, to receive two actuarial studies (one preliminary and one final) to estimate his or her retirement benefits. Any additional studies shall be provided only at the Mmember's expense. C. Early Retirement. You are eligible for early retirement upon the attainment of age 50 and the completion of 10 years of eC ited -&Service. D. Amount of Earlv Retirement Benefits. The amount of the early retirement benefit is calculated in the same manner as for normal retirement and is available asfollows: (1) Beginning on the date on which you would have qualified for normal retirement; or (2) Beginning immediately upon retirement, but if beginning immediately, the amount of the monthly benefit is actuarially reduced to take into account your ECredited -&Service to your date of actual retirement and your uAverage €Final eCompensation which amount shall be actuarially reduced to take into account your younger age and the earlier commencement of earlier retirement income payments. In no event shall the early retirement reduction exceed 3% for each year by which your age at retirement preceded your early retirement age. (3) Your retirement income will be reduced for monies received under the disability provisions of the pElan. E. Sunnlemental Benefit - Share Plan.. Pursuant to Florida law, there has been a separate member "share account" created for each member of the pElan. This supplemental benefit may or may not be funded and thus, you may or may not receive a retirement benefit from the share plan. If the share plan is funded, at retirement, termination (vested), disability or death, there shall be an additional benefit paid to you. The share plan is funded solely with state premium tax money and the funding that is received for this -&.share Pplan is allocated to your share account based on a formula which gives you an allocation based on your years of eCed sService or another formula to be determined. Your share account receives its proportionate share of the income or loss on the assets in the pDan. (00 140513.DOCX; 11 -4- � �5 F. Cost -of -Living, Adiustment. Future retirees with a minimum of 15 years of sC ed %Service shall receive a 1 % automatic cost -of -living adjustment beginning on the first October 1 following the attainment of age 58. The COLA is applicable to all forins of retirement, including normal and early retirement, terminated vested, disabilityretireesrt9d pre -retirement death beneficiaries, and DROP -participants. G. Other Retirement Options. At retirement, certain additional options are available as follows: (1) Ontional Forms of Retirement. In lieu of the amount and form of retirement income payable under normal and early retirement, you may elect to receive a retirement benefit in a different form so long as the form you elect is of equal actuarial value as the nonnal benefit. The optional forms of benefits which are available are: (a) A retirement income of a monthly amount payable to you for your lifetime only. (b) A retirement income of a modified monthly amount, payable to you during your lifetime and following your death, 100%, 75%, 66 2/3% or 50% of such monthly amount payable to a joint pensioner for his lifetime. (c) If you retire prior to the time at which social security benefits are payable, you may elect to receive an increased retirement benefit until such time as social security benefits shall be assumed to commence and a reduced benefit thereafter in order to provide, to as great an extent as possible, a more level retirement allowance during the entire period of retirement. (d) If you do .4ot participate in the DROP, you may also elect to receive an initial lump suin payment equal to 5%, 10%, 15%, 20% or 25% of your accrued benefit with the remaining 95%, 90%, 85%, 80% or 75%, respectively, payable in a form selected by you and provided for in (a), (b) or (c) above or in the normal form (10 years certain and life). (2) Deferred Retirement Ontion Plan (DROP). (a) If you become eligible for normal retirement, and are still employed by the City as a gpolice 9pfficer, you have the option of "retiring" from the pe+FAE�n pPlan but continuing your employment as a gpolice 9officer for an additional €rv� S years. *An election to participate in the DROP constitutes an irrevocable election to resign from the service of the City not later than 5 years from the commencement of DROP participation. You must request, in writing, to enter the DROP. (b) Upon entering the DROP, your retirement benefit is immediately calculated and each monthly benefit payment is deposited added into your DROP account. You will have your account credited with interest at the rate of 1.3% per annurn. {00140513.DOCX;1} -5- (:-�� — G (c) At the time of termination of employment at the end of the DROP period, you will receive your account balance in a lump sum and you will also begin receiving your monthly retirement benefit. (d) Once you enter the DROP, you are no longer eligible for disability or pre -retirement death benefits, nor do you accrue any additional eCr-edited sService. Your retirement benefit is fixed as of your entry date. You pay no member contributions to the pPlan once you enter the DROP. (e) Participation in the DROP is not a guarantee of employment and DROP participants shall be subject to the same employment standards and policies that are applicable to employees who are not DROP participants. (f) Additional information about the DROP can be obtained from the Board. H. Disability Retirement. You are considered disabled when you become totally and permanently unable to perform useful and efficient service as a Poolice Oofficer. A written application is made to the Board for a disability pension and the Board receives evidence of the disability and decides whether or not the pension is to be granted. If the pension is granted, the benefit amount shall be: (1) If the injury or disease is service connected, a benefit equal to your accrued benefit, but in any event the benefit shall not be less than 42% of your-aAverage Einal eCompensation. (2) If the injury or disease is not service connected, a benefit equal to your accrued benefit, but in any event the benefit shall not be less than 25% of your aAverage (Final eCompensation. This non - service connected benefit is only available if you have at least 10 years of c-Credited sService. Elfibility for disability benefits. Subject to (4) below, you must bean active member of the pPlan on the date the Board determines your entitlement to a disability benefit. (1) Terminated persons, either vested or non -vested, are not eligible for disability benefits. (2) If you voluntarily terminate your employment either before or after filing an application for disability benefits, you are not eligible for disability benefits. (3) If you are terminated by the City for any reason other than for medical reasons, either before or after you file an application for disability benefits, you are not eligible for disability benefits. (4) The onlv excention to (1) above is: (a) If you are terminated by the City for medical reasons and you have already applied for disability benefits before the medical termination, or; (b) If you are terminated by the City for medical reasons and you apply within 30 days after your medical termination date. {00140513.DOCX;1) -6- (� —� If either (4)(a), or (4)(b) above applies, your application will be processed and fully considered by the bBoard. Your disability benefit terminates upon the earlier ofdeath, with 120payments guaranteed, or recovery. You may, however, select a "life only" or "joint and survivor" optional form of benefit as described above under "Optional Forms of Retirement". Any condition or impairment of health caused by hypertension or heart disease resulting in death or total and permanent disability is presumed to have been suffered in the line of duty unless the contrary is shown by competent evidence; provided that you have successfully passed a physical examination on entering into service and there is no evidence of the condition at that time. For conditions diagnosed on or after January 1, 1996, if you suffer a condition or impairment of health that is caused by hepatitis, meningococcal meningitis, or tuberculosis, which results in total and permanent disability, it shall be presumed that the disability is in the line of duty, unless the contrary is shown by competent evidence as provided for in Section 112.181, Florida Statutes: provided that the statutory conditions have been met. To receive disability benefits, you must establish to the satisfaction of the Board, that such disability was not occasioned primarily by: (1) Excessive or habitual use of any drugs, intoxicants or narcotics. (2) Injury or disease sustained while willfully and illegally participating in fights, riots or civil insurrections or while committing a crime. (3) Injury or disease sustained while serving in any branch of the Armed Forces. (4) Injury or disease sustained after your employment as a gPolice officer with the City of Sebastian shall have terminated. (5) Injury or disease sustained while working for anyone other than the City and arising out of such employment. As a disabled pensioner, you are subject to periodic medical examinations as directed by the Board to determine whether a disability continues. You may also be required to submit statements from your doctor, at your expense, confirming that your disability continues. I. Death Before Retirement, If you die prior to retirement from the Police Department, your beneficiary shall receive the following benefit: (1) Prior to Vesting or Eligibility for Retirement. If you were not receiving monthly benefits or were not yet vested or eligible for early ornormal retirement, your beneficiary shall receive a refund of 100% of your accumulated contributions. (2) Deceased Members Vested or Eligible for Retirement with Snouse as Beneficiarv. If you die and, at the date of your death were vested or eligible for early or normal retirement, your spouse beneficiary shall be entitled to a benefit as follows: (a) {00140513.DOCX;1) If you were vested, but not eligible for normal or early retirement, your spouse beneficiary shall receive a benefit payable for 10 years, beginning on the date that you would have been eligible for early or normal retirement, at the option of your spouse beneficiary. The benefit shall be calculated as + �7 -7- Wi for normal retirement based on your eCfedited -sService and -aAverage €Final c-Compensation as of the date of your death and reduced as for early retirement, if applicable. Your spouse beneficiary may also elect to receive an immediate benefit, payable for 10 years, which is actuarially reduced to reflect the commencement of benefits prior to your early retirement date. (b) If you were eligible for normal or early retirement, your spouse beneficiary shall receive a benefit payable for 10 years, begimning on the first day of the month following your death or at your otherwise normal or early retirement date, at the option of your spouse beneficiary. The benefit shall be calculated as for normal retirement based on your eCredited sService and aAverage Final eCompensation as of the date of your death and reduced as for early retirement, if applicable. (c) Your spouse beneficiary may not elect an optional form of benefit, however, the Board may elect to make a lump sum payment if the total commuted value of benefit is less than $1,000.00. (d) Your spouse beneficiary may, in lieu of any benefit provided for in (a) or (b) above, elect to receive a refund of your accumulated contributions. (e) If your spouse beneficiary commences receiving a benefit under (a) or (b) above, but dies before all payments are made, the remaining benefit shall be paid to the estate of the spouse beneficiary. (3) Deceased Members Vested or Eligible for Retirement with Non- Snouse Beneficiary, If your beneficiary is not your spouse, the benefits payable to your non -spouse beneficiary are the same as those to a spouse beneficiary, however, the date of commencement ofthose benefits may be required to be earlier, with the resulting reduction in the amount. (4) In the event the bBoard purchased life insurance contracts to provide all or part of the death benefit provided herein, the death benefit payable under any such contract shall not exceed: (a) One hundred times your estimated normal monthly retirement income, based on the assumption that the present rate of compensation continues without change to normal retirement date; or (b) Twice the annual rate of compensation as of your date of death, or the single -sum value of the accrued deferred retirement income (beginning at normal retirement date) at your date of death, whichever is greater. In the event the death benefit paid by a life insurance company exceeds the limits set forth above, the excess of the death benefit over the limits shall be paid to the Plan fund. J. Termination ofEmnlovment and Vesting., If your employment is terininated, either voluntarily or involuntarily, the following benefits are payable: (1) If you have less than 10 years of eCFed4e4 &Service upon _ termination, you shall be entitled to a refund of the money you have contributed or you may leave it deposited with the Plan €mod. (2) If you have 10 or more years of eCredi-ted sService upon termination, you shall be entitled to a monthly retirement benefit. The benefit shall be determined in the same manner as for nonnal or early retirement and shall be based upon your eCredited sService, -aAverage #Final eCompensation and the benefit accrual rate as of the date of termination. The benefit shall be payable to you starting at your otherwise normal or early retirement date, determined based upon your actual years of <fedited sService, provided you do not elect to withdraw your contributions and provided you survive to your otherwise normal or early retirement date. If you do not withdraw your accumulated contributions and do not survive to your otherwise normal or early retirement date, your designated beneficiary shall be entitled to a benefit as provided herein for a deceased member, vested or eligible for retirement under Death Before Retirement. The Internal Revenue Code provides that certain eligible lump sum distributions from the Plan teem may be directly rolled over into qualified individual retirement accounts, annuities or certain other pension plans. A 20% withholding shall be required on taxable portions of such lump sum distributions not directly transferred to a new custodian. -The Plan i-s -intended to.gualif)Ljuid_e Section 401 of the Int rn Revenue Code as a Rualified Plan. It is imppItarlt that .yo _co_ ult qualified experts to detennii ot yo. a t12ayt_axes on the�ension l7rnefits ypu re��v_e. K. Contributions and Fiundi.ng. The City is paying the portion of the cost of the Plan peff&ie-syste*ff over and above your contributions, but in no event less than 14.2% of payroll and all or a portion of the amounts received from the state insurance rebates, pursuant to a mutual consent agreement between the City and the Union. You shall be required to make regular contributions to the 1?lan faiid in the amount of 8% of your sSalary. Police officer contributions withheld by the eCity on your behalf shall be deposited with the bBoard immediately after each pay period. The contributions made by you to the Plan_ fid shall be designated as employer contributions pursuant to §414(h) of the code. Such designation is contingent upon the contributions being excluded from the members' gross income for Federal Income Tax purposes. For all other purposes of the Plan sy4ern, such contributions shall be considered to be member contributions. L. Reeinplovment After Retirement. If you retire under non al or early retirement and wish to be reemployed by the eCity, you should be aware that your ability to continue to receive your pension benefit upon reemployment may be restricted. M. Additional Credited Service. In addition to eCr-t� sService actually earned in the employment of the Police Department, you may also receive e&,edked sService as follows: (1) "Buv-Back" for Prior Police Service. The years or fractional parts of years that you previously served as a Ppolice 0 fficer with the City of Sebastian during a period of previous employment and for which period accumulated contributions were withdrawn from the pPln shall be added to your years of eCredited sService provided that within the first 90 days of your reemployment you pay into the p-Planthe withdrawn contributions with interest. If, after 90 days from your reemployment you have failed to purchase eCredited sService pursuant to the previous paragraph or if you served as a full-time paid Ppolice 9officer for any other municipal, county or state law enforcement agency in the State of A Florida, you will receive CC--A-,--A sService only if: 77 ^ !p (a) You contribute to the plan a sum equal to: (i) the amount that you would have contributed to the pPlan, based on your sSalary and the member contribution rate in effect at the time that the eCr-edited sService is requested, had you been a member of the pPlan for the years or fractional parts of years for which you are requesting credit, plus (ii) an additional amount to be determined by the Board's actuary so that there is no cost to the pPlan in giving you the additional years of eCed sService, glus (iii) the amount charged by the actuary for determining the amount you must contribute. (b) Multiple requests to purchase eCfedit-ed sService may be made at any time prior to retirement, in one year increments, upon the completion of 5 years of eCfe4i�ed sService. (c) Payment of the required amount shall be made within 6 months of your request for credit, but not later than your retirement date, and shall be made in one lump sum payment upon receipt of which eC4.-,d4ed sService shall be given. (d) The maximum credit under this subsection for service other than with the City of Sebastian shall be 4 years of eCredited sService and shall count for all purposes, except vesting. There shall be no maximum purchase of credit for prior service with the City of Sebastian and such credit shall count for all purposes, including vesting. (e) In no event, however, may eCre44ed sService be purchased pursuant to this subsection for prior service with any other municipal, county or state law enforcement department, if such prior service forms or will form the basis of a retirement benefit or pension from a different employer's retirement system or plan. (f) In addition to service as a P-police 9officer in this State, credit may be purchased in the same manner as provided above for federal, other state, county or municipal service if the prior service is recognized by the Criminal Justice Standards and Training Commission within the Department of Law Enforcement, as provided under Chapter 943, Florida Statutes, or you provide proof to the Board that such service is equivalent to the service required to meet the definition of a Rpolice 9officer. (2) "Buv-Back" for Military Service Prior to Emnlovment. The years or fractional parts of years that you serve or have served on active duty in the military service of the Armed Forces of the United States, the United States Merchant Marine or the United States Coast Guard, voluntarily or involuntarily and honorably or under honorable conditions, prior to first and initial employment with the City Police Department shall be added to your years of ECredited sService provided that: L----- J - II (a) You contribute to the pPlan a sum equal to: (i) the amount that you would have contributed to the pPlan, based on your -&Salary and the member contribution rate in effect at the time that the eCr-e� -sService is requested, had you been a member of the pPlan for the years or fractional parts of years for which you are requesting credit plus (ii) an additional amount to be determined by the Board's actuary so that there is no cost to the pPlan in giving you the additional years of eCfe&ed -&Service, (iii) the amount charged by the actuary for determining the amount you must contribute. (b) Multiple requests to purchase eCredited -&Service may be made at any time prior to retirement, in one year increments, upon the completion of 5 years of eCr-e4i4e&l -&Service. (c) Payment of the required amount shall be made within 6 months of your request for credit, but not later than your retirement date, and shall be made in one lump sum payment upon receipt of which e=('fedited -&.Service shall be given. (d) The maximum credit under this subsection shall be 4 years and shall count for all purposes except vesting. (3) Rollovers or Transfers of Funds to Purchase Service. In the event you are eligible to purchase additional eCre 4ed -&Service as provided above, you may be eligible to rollover or transfer funds from another retirement program in which you participate (traditional IRA, deferred compensation plan maintained by a government employer 457 plan, 401k plan, profit sharing plan, defined benefit plan, money purchase plan, annuity plan or tax sheltered annuity) in order to pay all or part of the cost of purchasing such additional eC ted -&Service. N. Maximum Benefits. In no event will the annual benefits paid from this System Plan exceed $215,000 annually, subject to certain cost of living adjustments and actuarial reductions, under certain circumstances, prior to age 62 as set forth in Section 415 of the Internal Revenue Code. If you began participation for the first time on and after January 1, 1980, you cannot receive a benefit in excess of 100% of your eAverage €Final eCompensation. 0. Forfeiture of Pension. If you are convicted of the certain crimes listed in the pPlan document committed prior to retirement, or if your employment is terminated by reason of your admitted commission, aid or abetment of these crimes, you shall forfeit all rights and benefits under the Plan Syste , except for the return of your contributions as of the date of your termination. P. Conviction and Forfeiture: False. Misleading or Fraudulent Statements. It is unlawful for you to willfully and knowingly make, or cause to be made, or to assist, conspire with, or urge another to make, or cause to be made, any false, fraudulent, or misleading oral or written statement or withhold or conceal material information to obtain any benefit from the Plan System. If you violate the previous paragraph, you commit a misdemeanor of the first degree, punishable as provided in Section 775.082 or Section 775.083, Florida Statutes. In addition to any applicable criminal penalty, upon conviction for a violation described above, you or your beneficiary may, in the discretion of the Board, be required to forfeit the right to receive any or all benefits to which you would otherwise be entitled under the Plan. For purposes of this subsection, "conviction" means a determination of guilt that is the result of a plea or trial, regardless of whether adjudication is withheld. Q. Claims Procedure Before the Board. You may request, in writing, that the Board review any claim for benefits under the Plan System. The Board will review the case and enter a decision as it deems proper within not more than 180 days from the date of the receipt of such written request, or in the case of a disability claim, from receipt of a medical release and completed interrogatories. The time period may be extended if you agree to theextension. The Board's decision on your claim will be contained in an order which will be in writing and will include: (1) The specific reasons for the Board's action; (2) A description of any additional information that the Board feels is necessary for you to perfect your claim; (3) An explanation of the review procedure next open to you which includes a formal evidentiary hearing. 4. NON -FORFEITURE OF PENSION BENEFITS A. Liquidation of Plan Reny n—f �d Assets. In the event of repeal, or if contributions to the Plan Fu l are discontinued by the City, there will be a full vesting of benefits accrued to date of repeal. B. Interest of Members in OW Pari&i in Funnd. At no time prior to the satisfaction of all liabilities under the Plan &y-st� shall any assets of the Plan Syst be used for any purpose other than for the gpolice 8officers' exclusive benefit. In any event, your contributions to the Plan gy� are non- forgettable. 5. VESTING OF BENEFIU Your retirement benefits are vested after 10 years of eCred-ted iaService. 6. APPLICABLE LAW The Plan System is governed by certain federal, state and local laws, including, but not limited to the following: A. Internal Revenue Code and amendments thereto. B. Chapter 185, Florida Statutes, "Municipal Police Officers' Retirement Trust Fund's". C. Part VII, Chapter 112, Florida Statutes. "Actuarial Soundness of Retirement — "Systems". D. Ordinance of the City of Sebastian. E. Administrative rules and regulations adopted by the Board ems=ustees. F. CLAN YEAR_AND_PL .N RECQRDS The pDan year begins on October 1 of each year and ends on September 30 of the following year. All records of the Plan System are maintained on the basis of the pPlan year. G. APPLICABLE PROVISIONS OF COLLECTIVE BARGAINING AGREEMENTS There is a current collective bargaining agreement between the City and the PtoliceOOfficers. Pension benefits are bargainable. H. FINANCTAL AND ACTUARIAL INFORMATION a. A report of pertinent financial and actuarial information on the solvency and actuarial soundness of the Plan S;Yste has been prepared by the R�Plan's actuary, Foster & Foster, Inc., and is attached as Exhibit nB n b. A copy of the detailed accounting report of the pPlan's expenses for the fiscal year is available for review upon request to the Plan Administrator. C. A copy of the administrative expense budget for the pPlan, for each fiscal year is available for review upon request to the Plan Administrator. I. DIVORCE OR DISSOLUTION OF MARRIAGE Federal and state law provides certain restrictions regarding the payment of your pension benefits in the event of your divorce or dissolution of marriage. Immediately upon your involvement in such a legal proceeding, you should provide a member of the Board with the name and address of your attorney or your name and address if you have no attorney. The Board's attorney will then provide you or your attorney with information concerning the legal restrictions regarding your pension benefits. In addition, a copy of any proposed order must be submitted to the Board prior to entry by the court. Failure to do so may require you to pay any expenses incurred by the Board in correcting an improper court order. Effective Januaxy__1, 2019. changes in the federal tax laws have eliminated Iax deductions for alimonyif a marriage was dissolved or a prop rrty settlement agreement was made on or after January 1,2019. Modifications to existing-QLd r a eements on or after Jamiax , 2019_ maydeducible be tax deduble if both parties 4 ee.. ���e J. E&SPf�JSE�A�S FE;IYEFICIRY OR JOINT PENSIONED The Florida Legislature has adopted Section 732.703, Florida Statutes. This law nullifies the designation of your ex -spouse as a Beneficiary or Joint Annuitant/ Joint Pensioner on your pe+-,sien pPlan retirement benefits. This law went into effect on July 1, 2012. After July 1, 2012, if you want your ex -spouse to be a beneficiary or joint annuitant/joint pensioner for your pPlan benefit, you will have to make that designation AFTER the dissolution of marriage. If you currently have an ex -spouse as a beneficiary or joint annuitant/joint pensioner, and want to keep this designation, you will have to designate the ex - spouse again after July 1, 2012. To reconfirm your current beneficiarv. or to designate a new beneficiary, complete a new Designation of Beneficiary Form (PF-3). 4 To reconfinn our current joint annuitant/iointnensioner. or to designate t: l " y gnate a new joint annuitant/joint pensioner (if authorized by the current pPlan provisions), indicate such change on a Change or Confirmation of Designated Joint Annuitant or Joint Pensioner Fonn (PF-25). If necessary, the pPlan administrator will submit the new form to the actuary of the PPlan for recalculation of your benefit. There may be a charge to you to make this change. To obtain either of the above forms, or if you have any questions, please contact your plan eAdministrator. K. EXCLLSION OF HEALTH INSURANCE PREMIUMS FROM INCOME. When you retire because of disability or have worked to the date you are immediately eligible for normal retirement (not early retirement), you can elect to exclude from income, distributions made from your benefit that are used to pay the premiums for accident or health insurance or long-term care insurance. The premium can be for coverage for you, your spouse, or dependents. The distribution must be made directly from the pPlan to the insurance provider using pension form PF-22 which authorizes the distribution. (This form may be obtained from your pPlan -aAdministrator) You can exclude from income the smaller of the amount of the insurance premiums or $ 3,000.00. You can only make this election for amounts that would otherwise be included in your income. E �-IS EXHIBIT "A" BOARD OF_TRUSTEE_S, The names and addresses of the members of the Board of Trustees are: Chairman: Ric-Aard �� Jason Gillette 1201 Main Street Sebastian, Florida 32958 Member: = 4au1 Main vfraat S'ebatt &n, FI1- iLd. 3.29-58 Member: Tim Wood_ Id-O ( ai2,zH Main Street Sebastian, Florida 32958 Member: Paul Williamson Main Street Sebastian, Florida 32958 Member: 1201 Main Street Sebastian, Florida 32958 Plan Administrator: Mr. Ken Killgore 1225 Main Street Sebastian, Florida 32958 Phone: (772)388-8205 E-Mail: kkillaoreCrr�CitvofSebastian.orLT Plan Custodian: Salem Trust Company l�l//��,�� ,,k1 455 Fairway Drive, Suite 103 OWL Deerfield Beach, Florida 33441 Tel: - tqA City of Sebastian Police Officers' Retirement System Statement of Investment Policy Goals and Guidelines Adopted March 17, 2020 Introduction The City of Sebastian Police Officers' Retirement System is a defined benefit plan established by Ordinance of the City of Sebastian to provide retirement benefits for its employees. The City of Sebastian is the "plan sponsor". The Plan is administered by the Police Pension Fund Board of Trustees. The Plan is a pension plan maintained to provide retirement, disability, termination and death benefits to participants in accordance with the express provisions of the Plan. The Plan and the benefits provided thereunder are funded by contributions by the City of Sebastian, tax rebates from the State of Florida pursuant to Chapter 185, Employees' contributions, interest income and other income in accordance with the underlying Plan documents. The Board of Trustees of the City of Sebastian Police Officers' Retirement System has established this Statement of Investment Policy. The trustees are named fiduciaries. The investment of the assets of our retirement plan must be consistent with the written investment policy adopted by the board of trustees. The policies are structured to maximize the financial return to the retirement plan consistent with the risks incumbent in each investment and are structured to establish and maintain an appropriate diversification of the retirement system or plan's assets. To assist the Board in this function, they are authorized to engage the services of investment and actuarial consultants to provide expert assistance. The Board determined this Policy after evaluating the implications of increased investment return versus the increased volatility of return for a number of asset allocation strategies with varying commitments to stocks and bonds. In the view of its consultants and the Board, the investment program defined in this Statement will produce a result over the long term consistent with the Plan's primary objective of preserving and enhancing the purchasing power of assets. Puraose This Policy is intended to complement the investment guidelines provided in all applicable State Statutes and local ordinances. The purpose of this Policy is to define the City of Sebastian Police Officers' Retirement System investment objectives to develop a strategy to help meet investment goals. This statement is meant to clarify risk factors to establish guidelines consistent with the investment profile of the City of Sebastian Police Officers' Retirement System. Through open communication among the Fund, Investment Consultant and Investment Managers, continuity of investment direction can be more easily achieved. This Policy is meant to: 1. Provide the investment consultant and manager(s) a more accurate understanding- Fwmamad. space after: 6 pt of the Trustees' investment objectives and, 2. Indicate the criteria by which the investment manager's performance will be evaluated. In the implementation of the investment program, the Plan will employ investment managers who have demonstrated expertise with particular asset classes. Pursuant to the Prudent Investor Rule, the Plan's investment policy will utilize a variety of investment approaches. This diversification of managers and investment approach is intended to increase the risk adjusted return of the portfolio and contribute to a more consistent return. Nonetheless, the systemic risk inherent in the overall market can —not be diversified away. Consequently, there will be periods of time -when the fund may experience negative returns. Such periods are not inconsistent with achievement of the targeted long term objective. General Obi ectives The primary investment objective of the City of Sebastian Police Officers' Retirement System is the preservation of invested capital. The secondary objective is to achieve moderate long term real growth of the assets while minimizing the volatility of returns. To achieve these objectives, the Board seeks to create a conservative, well diversified and balanced portfolio of equity, fixed income, and money market securities. The Board has determined that one or more outside investment managers shall be retained to assure all investments are managed in a prudent and professional manner and in compliance with the stated investment guidelines. �a Investment Oblectives Investment Objectives are intended to provide quantifiable benchmarks to measure and evaluate portfolio return and risk. Asset allocation requires a full market cycle to allow a diversified portfolio of investment managers to demonstrate their abilities. As a result, performance results will be measured over a full market cycle. Performance over shorter time periods will be monitored as a means of identifying the trend of results. The specific investment objectives of the City of Sebastian Police Officers' Retirement System are as follows: Primary Objective: To earn a total rate of return over the long term (a full market cycle) which exceeds the return of a Target Index. The Target Index for the City of Sebastian Police Officers' Retirement System is defined as: 21.25% Russell 1000 Value, 21.25% Russell 1000 Growth, 5.00% Russell 2500 Value, 5.00% Russell 2500 Growth, 5% MSCI EAFE (Net), 7.50% MSCI ACWI ex US (Net), 25% Rlnombr._. Barclays GapiW U.S. Aggregate, 5.00% Alerian MLP, 5.00% NCREIF indexes. In addition, it is expected the total rate of return earned by the Fund and the returns earned by the stock, bond, and cash portfolios will rank above average when compared to a representative universe of other similarly managed portfolios. Secondary Objectives: A further goal of the City of Sebastian Police Officers' Retirement System shall be to achieve an a_ mal ivAe , e a return greater than 7.69; the assumed actuarial rate of reti over the longer term. This absolute return objective will be evaluated in the context of the prevailing investment market conditions. In addition, the Fund should earn a return greater than inflation, as measured by the Consumer Price Index, by 3.0% per year. Volatility: The volatility of the Funds total returns is expected to be similar to the Target Index and will be evaluated accordingly. C�3 Investment Strateo Guidelines Based on an analysis of Plan assets and expected returns and risks associated with various asset mix strategies, the Board of Trustees has established a target asset allocation for the entire City of Sebastian Police Officers' Retirement System to meet the long term investment goals of the Fund. Investment Policy Portfolio Allocation Asset Class Benchmark Min Target Max EQUITIES 40.00% 65.00% 70.00% Large Cap Equity Large Cap Value RUSSELL 1000 15.00% 21.25% 25.00% VALUE Large Cap Growth RUSSELL 1000 15.00% 21.25% 25.00% GROWTH SMid Cap Equity SMid Cap Value RUSSELL 2500 2.50% 5.00% 7.50% VALUE SMid Cap Growth RUSSELI. 2S}° 2.50% 5.00% 7.50% GROWTH International (INT'L) Int'1 Value MSCI EAFE 2.50% 5.00% 7.50% Int'l Growth MSCI ACWI ex 5.00% 7.50% 10.00% Us (Net} FIXED INCOME 20.00% 25.00% 35.00% Core Fixed Income BLOOA'IBERG 20.00% 25.00% 30.00% BARCLAY'S CITU.S. AGGREGATE Cash Equivalents 3-MONTH I BILLS Master Limited ALERIAN I4iLP 0.00% 5.00% 10.00% Partnerships Private Real Estate NCREIF 0.00% 5.00% 10.00% Total Alternatives 0.00% 10.00% 20.00% The allocation to each asset class may vary from the target asset allocation depending upon market conditions. When necessary and/or available, cash may be deployed in a manner consistent with the strategic asset allocation limits set by this statement of investment policy. 4 Professional MoneN Manaeers To implement this strategy, the Board has chosen to hire one or more professional investment managers. Within the guidelines and restrictions set forth within, it is the intention of the Board of Trustees to give each investment manager full investment discretion with respect to assets under its management. The investment managers shall discharge their responsibilities in the same manner as if the Fund were governed by the fiduciary responsibility provisions of the Employee Retirement Income Security Act of 1974 (ERISA). Although the Fund Trustees acknowledge ERISA does not apply to a governmental fund, the trustees hereby imposes the fiduciary provisions of ERISA upon each investment manager whose performance shall conform to statutory provisions, rules, regulations, interpretations and case law of ERISA. Each investment manager shall acknowledge, in writing, that it is a named fiduciary of the Fund. The signed document shall be attached to this Investment Policy Statement. Each investment manager is expected to provide any reasonable information requested by the Board of Trustees. At a minimum, managers shall provide a quarterly report detailing their investment activity, the portfolios current value and any changes in investment philosophy or strategy. Each investment manager is expected to meet with the Board of Trustees or their designated representatives periodically to review investment performance and philosophy. Unless otherwise provided by the Funds' Custodian, each investment manager will monitor portfolio activity to minimize uninvested cash balances. Each investment manager shall be responsible only for those assets under their management. It will be the responsibility of each investment manager to review the monthly valuations provided by the Funds custodian and to note, in writing, any significant discrepancies from the valuations provided in their own reports. Caution must be used in selecting appropriate money managers to manage the Fund's assets. At a minimum, the money manager must meet the following criteria: 1. Be an investment management company, bank, insurance company, or Investment- Formatted: Space after. 5 pt Consultant as defined by the Registered Investment Advisers Act of 1940. 2. Provide historical quarterly performance data calculated on a time weighted basis, based on a composite of all fully discretionary accounts of similar investment styles, and reported net and gross of fees. 3. Provide detailed information on the history of the firm, key personnel, fee schedules and support personnel. �s s 4. Have no outstanding legal judgments or past judgments that may reflect negatively on the firm. Securities Guidelines In accordance with the policies established by the Board of Trustees, the assets of the City of Sebastian Police Officers' Retirement System shall be invested in a diversified portfolio of fully negotiable equity, fixed income, and money market securities, provided they meet the following criteria: Equity Securities 1. Investments in all equity securities shall be limited to no more than 70% (at market) of the Fund's total portfolio value. 2. All equity investments shall be limited to fully and easily negotiable equity securities. 3. No more than 10% at market value of an investment manager's equity portfolio may be invested in the shares of a single corporate issuer. The equity position in any one company shall not exceed 5% of the total plan portfolio at market. 4. Allocation to any one economic sector should not be excessive and should be consistent relative to a broadly diversified equity market and to managers following similar style disciplines. 5. Investments in stocks of foreign companies shall be limited to 25% (at market value) of the total investment portfolio. The definition of a foreign stock for purposes of this policy is found in Florida Statues, Section 185.06(1)(b)4. The compliance and monitoring of this Section (Equity Securities) is the responsibility of the consultant and the trustees. The consultant's responsibility is to report any non-compliance to the trustees each quarter. a.) Larce —Capitalization Value & Growth Stocks Large capitalization stocks are expected to have the greatest weighting in the Pension Fund. They are expected to provide more consistent returns over time than other equity styles. The objective is to maximize investment return over a market cycle by investing in large capitalization equities having the potential to generate investment returns exceeding a passively managed large stock index. Large -capitalization equity manager performance parameters include the following: G Performance within the top half of a Universe of Large Capitalization Value or Growth Managers. • Performance comparable to the appropriate Russell Indexes indexes commensurate with the recognized level of risk. • The risk associated with the manager's portfolio as measured by the variability of quarterly retums (standard deviation) should not exceed the comparison index without a corresponding increase in performance above the index. • Achieve the performance parameters within a time horizon of a minimum of a full market cycle. b.) Mid/Small Capitalization Stocks Mid/Small capitalization stocks are expected to improve total portfolio diversification and provide opportunities for higher incremental returns in the long run. The objective is to maximize investment return over a market cycle by investing in mid/small capitalization equities having the potential to generate investment returns exceeding a passively managed mid/small stock index. Mid/Small capitalization growth stock managers generally purchase companies with a market capitalization of greater than $500 million. Mid/Small capitalization equity manager performance parameters include the following: • Performance within the top half of a Universe of Mid/Small Capitalization Value or Growth Managers Performance comparable to the appropriate Russell indexes commensurate with the recowiizea level of risk. Formatted: Indent: Left: 0.5", No bullets or 1 numbering • Achieve the performance parameters within a time horizon of a minimum of a full market cycle for the mid/small capitalization market. c.) Developed & Emer,in Markets International Stocks International Stocks are expected to improve total portfolio diversification and provide opportunities for higher incremental returns in the long run. The objective is to maximize investment return over a market cycle by investing in international securities through American Depository Receipts (ADRs) as well as any foreign company that trades directly in a U.S. equity market. These equities should generate investment returns exceeding a passively managed international index. Developed & Emerging Markets International equity manager performance parameters include the following: MSG! Emerging Mffkets Indexes-. • Performance comparable to to the aoorooriate MSCI developed and emeraine, markets international indexes commensurate with the recognized level of risk. • T-hi mh sjjeeiated r i iv.=.Os peF&Iie as ineastwed by the variabil .x -xiveed the • Achieve the performance parameters within a time horizon of a minimum of a full market cycle of the international market. Fixed Income Securities 1. Investments in corporate fixed income securities shall be limited to: a) Those securities rated investment grade by a recognized rating agency! FonnatEed: Space After: 6 pt Fixed income securities downgraded below the minimum rating by both entities shall be sold at the earliest beneficial opportunity as deteinuned by the manager. It is the manager's responsibility to notify the board in writing immediately after a security is downgraded below the policy guidelines. The written explanation should describe the manager's intentions regarding the disposition of the security being downgraded. b) Securities issued by a corporation organized under the laws of the United States, any state or organized territory of the United States, or the District of Columbia. c) No more than 10% (at market) of the fixed income portfolio total value may be invested in the securities of any single corporate issuer. 2. Investments in Collateralized Mortgage Obligations shall be limited to 25% of the market value of the total fixed income portfolio and shall be restricted to those issues: a) Those issues backed by the full faith of the U.S. Government, an Agency- Formatted. Space After: 6 pt thereof, or rated AAA by a major rating service. b) PAC (planned amortization class), NAC (non -accelerated securities) or VADM (very accurately defined maturity) securities. 3. There is no limit imposed on investments in fixed income securities issued directly by the United States Government or any agency or instrumentality thereof. Fixed income manacerf si performance parameters include the followine: • Performance comnarable to the aonronriate Bioombere Barclays Fixed Income Index commensurate with the recognized level of risk. • Achieve the above obiectives within a time horizon of a minimum of a full market cycle. 9 Cash Equivalent Securities: The Investment managers may invest only in the following short — term investment vehicles: a) The money market or STIF provided by the Fund's custodian. Formatted: Space After: 6 pt b) Direct Obligations of the United States Government with a maturity of one year or less. c) Commercial Paper issued by United States corporations with a maturity of one year or less. Master Limited Partnerships Master Limited Partnerships (MLPs) are utilized to provide additional income to the portfolio. They are expected to provide a higher level of income than fixed income securities in a low interest rate environment. MLP manager performance parameters include the following: • STueooc '.\.r� Performance comoarable to the Alerian MLP Index commensurate with the recosnized level of risk. + SIts +ia'r tls.- quaturly mt,4ni • Achieve the performance parameters within a time horizon of a minimum of a full market cycle. Private Real Estate Private real estate investments are expected to improve total portfolio diversification and provide income and opportunities for higher incremental returns in the long-term. The objective is to maximize investment return over a market cycle by investment in real estate through private ownership. The investment managers are permitted to invest in private real estate. Private real estate will be purchased through an institutional vehicle. The institutional vehicle provides diversification of property type and geographical location and provides a competitive price structure. These private real estate investments should generate investment returns exceeding a passively managed private real estate index. Private real estate investment performance parameters include the following: • £meeed Performance corroarable to the National Council of Real Estate Investment Fiduciaries (NCREIF) Property Index or Open -End Diversified Core Index indexes commensurate with the recor:nized level of risk.- 10 The Fisk asseeimed with the r • Achieve the above objectives within a time horizon of a minimum of a full real estate market cycle. Mutual Funds/Commingled Funds/Exchanae Traded Funds: The Board of Trustees recognizes and accepts commingled fund. -sal mutual fund_and exchange traded fund investments will be dictated by the investment policies and guidelines of those funds and no additional constraints may be imposed upon them. The decision to invest assets of the City of Sebastian Police Officers' Retirement System in any commingled fund, mutual fund, or exchange traded_fund will only be made by the Trustees after a thorough review of the policies and/or prospectuses of those funds and after it has been determined those policies are appropriate and consistent with the investment philosophy of the City of Sebastian Police Officers' Retirement System. Sudan/Iran Divestiture In accordance with the Protecting Florida's Investment Act (Fla. Star. 215.473), the Board is prohibited from directly investing in any company identified each quarter by the State Board of Administration on its website as a scrutinized company. The Board shall review its investments each quarter to determine whether it is required to sell, redeem, divest, or withdraw any publicly traded security of a company identified by the SBA as a scrutinized company. Section 112.661 Florida Statutes The Board of Trustees has adopted the following additional provisions to comply with Section 112.661, Florida Statutes: 1. SCOPE: The investment policy applies to those funds under control of the Board. 2. INVESTMENT OBJECTIVES: The investment policy describes the investment objectives of the Board. 3. PERFORMANCE MEASUREMENT: The investment policy specifies performance measures as are appropriate for the nature and size of the assets within the Board's custody. 11 4. INVESTMENT AND FIDUCIARY STANDARDS: In performing its investment duties, the Board and its investment managers shall comply with the fiduciary standards set forth in ERISA (Employee Retirement Income Security Act). 5. AUTHORIZED INVESTMENTS: The Board of Trustees recognizes those assets listed in its attached Statement of Investment Policy. Investments not listed are prohibited. 6. MATURITY AND LIQUIDITY REQUIREMENTS: The investment portfolio shall be structured in such a manner to provide sufficient liquidity to pay obligations as they come due. To the extent possible, an attempt will be made to match investment maturities with known cash needs and anticipated cash -flow requirements. 7 PORTFOLIO COMPOSITION: The investment policy establishes guidelines for investments and limits on security issues, issuers and maturities. These guidelines are commensurate with the nature and size of the funds within the custody of the Board. 8. RISK AND DIVERSIFICATION: The Board of Trustees has developed a diversified investment program to control the risk of loss resulting from over concentration in a specific maturity, issuer, instrument, dealer or bank through which financial instruments are bought and sold. 9. EXPECTED ANNUAL RATE OF RETURN: With consideration to rates of return from different asset classes, the Board of Trustees has crafted its investment program to deliver an expected rate of return similar to the actuarial assumed rate. The Board shall determine for each actuarial valuation, the total expected annual rate of return for the current year, for each of the next several years and for the long term thereafter. The total expected annual rate of return is anticipated to be similar to the actuarial assumed rate of return. This determination is filed with the Department of Management Services and with the plan sponsor and consulting actuary. 10. THIRD -PARTY CUSTODIAL AGREEMENTS: All assets shall be held by a third party custodian selected by the Board. Securities transactions between a broker -dealer and the custodian involving purchase or sale of securities by transfer of money or securities are to be made on a "delivery vs. payment" basis to ensure the custodian will have the security or money in hand at conclusion of the transaction. 11. MASTER REPURCHASE AGREEMENT: Repurchase Agreements are prohibited investments. 12 12. BID REQUIREMENT: To the extent possible, the intention of the Board of Trustees is to determine the approximate maturity date based on cash -flow needs and market conditions, analyze and select one or more optimal types of investment and competitively bid the security in question when feasible and appropriate. Except as otherwise required by law, the most economically advantageous bid is selected. 13. INTERNAL CONTROLS: The Board recognizes the internal controls and operational procedures outlined in the Board's operation rules and procedures, in the plan document, and in the custodial agreement. These controls are reviewed by the Board's independent certified public accountant as part of the financial audit periodically required. The internal controls are designed to prevent losses of funds, which might arise from fraud, error and misrepresentation, by third parties or imprudent actions by the Board or employees of the plan sponsor. 14. CONTINUING EDUCATION: The Board of Trustees relies on its consultants and professionals to provide continuing education on pension and investment issues. The Board of Trustees recognizes state and regional conferences as a source of continuing education. The Trustees are encouraged to attend conferences, schools, and other functions periodically to fulfill this requirement. 15. REPORTING: The Custodian's valuation report is filed annually with the plan sponsor. This report is available to the public. 16. FILING OF INVESTMENT POLICY: The investment policy is promptly filed with the Department of Management Services, plan sponsor and consulting actuary. The effective date of the investment policy and any amendment thereto shall be the 31 " calendar day following the filing date with the plan sponsor. 17. VALUATION OF ILLIQUID INVESTMENTS: The Board defines an illiquid investment as one for which a generally recognized market is not available or for which there is no consistent or generally accepted pricing mechanism. Should an investment become illiquid or in the event the fund acquires an illiquid investment, the Board shall develop the methodology for valuation as set forth in the criteria in Section 215.47(6), Florida Statutes (the SBA/FRS methodology for valuation). 13 ASSIGNMENT OF RESPONSIBILITIES Responsibility Table Fiduciary Written Written Strategic Asset Allocation Manager Security Performance Level Investment Investment Allocation Within Search & Selection Measurement Policy Strategy Among Asset Asset Selection Classisi Classm Trustees 1 1 1 4 1 4 4 Investment 2 2 2 2 2 4 3 Consultant Investment 4 4 2 2 4 1 3 Manag er; s) Custodian 4 4 4 4 4 4 4 Delegation of Responsibility: 1)Approves 2) Recommends 3) Monitors 4) Informed INVESTMENT POLICY REVIEW The intention of the Board of Trustees is to review this Statement of Investment Policy and its addenda periodically and to amend it to reflect any changes in philosophy or objectives. However, if at any time the Investment managers believe the specific objectives defined herein cannot be met or these guidelines unnecessarily constrict performance, the Trustees shall be so notified in writing. ACCEPTANCE AND AUTHORIZATION This statement of investment policy is adopted Man _ 17; by the Board of Trustees of the City of Sebastian Police Officers' Retirement System whose signatures appear below. Chairman, Board of Trustees City of Sebastian Police Officers' Retirement System 14 Investment Manager's Acknowledgment I, the undersigned, acknowledge I have received the policy statement for the City of Sebastian Police Officers' Retirement System, dated_ . I affirm I have read and understand said Policy Statement, and do hereby agree to abide to the guidelines expressed in the Policy Statement. Name of Firm Signed Date 15 EAdbit 3, Sebastian Pefiee Offieer-s' Retirement System investment PoNey Chanp Lft Da4e I Seetien 16 A Self -Assessment for the Trustees of the City of Sebastian Police Officers' Retirement System • Are investments managed in accordance with applicable by-laws, trust - Formaftd: Space After: 6 pt documents, and written investment policy statements? • Are the roles and responsibilities of all involved parties defined, documented and acknowledged? • Are service agreements and contracts in writing? Are they written with provisions that conflict with fiduciary standards of care? • Has an investment time horizon been identified? • Has a risk level been identified? • Has an expected, modeled return to meet investment objectives been identified? • Are selected asset classes consistent with identified risk, return and time horizon? • Are selected asset classes consistent with implementation and monitoring constraints? • Is there an Investment Policy Statement (IPS), which contains the detail to define, implement, and manage a specific investment strategy? • Is the investment strategy implemented in compliance with the required level of prudence? • Does the IPS define appropriately structured, socially responsible investment strategies (where applicable)? • Are Investment vehicles appropriate for the portfolio, size? • Is a due diligence process followed in selecting service providers, including the custodian? • Are there periodic reports comparing investment performance against an appropriate index, peer group, and IPS objectives? • Are periodic reviews made of qualitative and/or organizational changes of investment decision -makers? • Are control policies in place to periodically review policies for best execution, "soft dollar", and proxy voting? • Are fees for investment management consistent with agreements and all applicable laws? • Are "finder's fees" or other forms of compensation that may have been paid for asset placement, appropriately applied, utilized and documented? Is there a process to periodically review the Organization's effectiveness in meeting its fiduciary responsibilities? 17 Kenneth Killvore From: Bonni Jensen <bonni@robertdklausner.com> Sent: Thursday, January 02, 2020 12:32 PM To: Kenneth Killgore Cc: Cynthia Watson; bsjteam Subject: Sebastian Police Pension Fund - Operating Rules Attachments: final Operating Rules 2018 (00119050xBC171).pdf CAUTION: This email originated from outside your organization. Exercise caution when opening attachments or clicking links, especially from unknown senders. Ken, I have reviewed the Operating Rules which were last amended in December of 2019. 1 do not have any suggested changes. The only change I made was to update the cover from the one that you were provided in January, 2019 to show the actual meeting approval dates from the last two versions. Please let me know if you want any changes to the Rules. To expedite the handling of your email, please be sure to copy bsiteam@)robertdklausner.com on your emails. Bonni S. Jensen Klausner, Kaufman, Jensen & Levinson 7080 N.W. 4eh Street Plantation, Florida 33317 Telephone: 954-916-1202 Facsimile: 954-916-1232 bonniCc�robertdkiausner.com website—www.klausnerkaufman.com I�'1{f1 CONFIDENTIALITY NOTICE: This communication is confidential, may be privileged and is meant only for the intended recipient, If you are not the intended recipient, please notify the sender ASAP and delete this message from your system. IRS CIRCULAR 230 NOTICE: To the extent that this message or any attachment concerns tax matters, it is not intended to be used and cannot be used by a taxpayer for the purpose of avoiding penalties that may be imposed by law. OPERATING RULES AND PROCEDURES For The CITY OF SEBASTIAN POLICE OFFICERS' RETIREMENT SYSTEM Approved by the Board on: December 18, 2018 March 17, 2017 00119050.WPD;1 6 1 CITY OF SEBASTIAN POLICE OFFICERS' RETIREMENT SYSTEM OPERATING RULES AND PROCEDURES TABLE OF CONTENTS SECTION Rule 1 - Board of Trustees PAGE NUMBER 1.1 Definition of Functions 1 1.2 Definition of Fiduciary 1 1.3 Summary 1 1.4 Establishment of Offices 1 1.5 Conflicts of Interest and Gifts 2 1.6 Per Diem and Reimbursement 2 1.7 Election Procedures 2 1.8 Succession of Persons to Vacant Positions 3 1.9 Education Requirements 4 1.10 Disclosure of Financial Interests 4 Rule 2 - Meetings 2.1 Attendance at Board Meetings 4 2.2 Agendas and Other Meeting Materials 5 2.3 Rules of Order 5 2.4 Appearance Before the Board 6 2.5 Public Records 6 2.6 Government in the Sunshine 6 2.7 Committee Meetings 7 2.8 Workshops 7 2.9 Minutes 7 Rule 3 - Rules of Procedure 3.1 Legal Effect 7 3.2 Adoption Procedures 8 Rule 4 - Plan Administrative Assistant/Office Personnel 4.1 Board Employees/Independent Contractors 8 4.2 Selection Standards 8 4.3 Evaluation and Compensation 8 4.4 Decision Making Authority 8 Rule 5 - Internal Procedures and Controls 5.1 Mail 9 5.2 Expense Payments from the Fund 9 5.3 Processing of Payments for Early or Normal Retirement and Return of Contributions 10 5.4 Review of Custodial Statements 11 5.5 Rollovers to and from the Fund 12 00119050. WPD;1 �� Table of Contents Page 2 Rule 6 - Insurance 6.1 Fiduciary Insurance 12 6.2 Travel Coverage 12 Rule 7 - Relations With The City 7.1 Authority of the Board 12 7.2 Contractual Services 12 7.3 Use of the City Finance Department 13 7.4 Use of Independent Custodians 13 7.5 Administrative Services 13 Rule 8 - Ordinance Changes 8.1 Form of Ordinance 13 8.2 Collective Bargaining 13 8.3 Appearance at City Council Meetings 14 8.4 Actuarial Impact Studies 14 Rule 9 - Judicial Proceedings 9.1 Process 14 9.2 Dissolution of Marriage 14 Rule 10 - Investments 10.1 Hiring Investment Managers 14 10.2 Hiring Performance Monitors 15 10.3 Performance Goals and Objectives 15 10.4 Investment Standards 16 10.5 Decision Making Authority 16 10.6 Written Contracts 16 10.7 Reporting 17 10.8 Presentations by Prospective Consultants and Professionals 17 10.9 Divestiture 18 10.10 Proxy Voting 18 10.11 Declaration of Expected Annual Rate of Return 19 10.12 Investment Reports to the City 19 Rule 11 - Actuarial Services 11.1 Selection 19 11.2 Conflicts of Interest 19 11.3 Reporting 19 11.4 Setting Contribution Rates 20 00119050.WPn;1 4 t Table of Contents Page 3 11.5 Credited Service 20 11.6 Actuarial Studies for Individual Plan Members 20 Rule 12 - Accounting Services/Administrative Budget 12.1 Audits 20 12.2 Conflicts of Interest 21 12.3 Review of Internal Controls 21 12.4 Detailed Accounting Report 21 12.5 Administrative Budget 21 Rule 13 - Legal Services 13.1 Selection 22 13.2 Conflicts of Interest 22 13.3 City of Sebastian City Attorney 22 13.4 Privileged Communications 22 13.5 Authority to Direct 22 13.6 Contracts 23 Rule 14 - Claims Procedures 14.1 Claims of Affected Persons 23 14.2 Initial Hearing 24 14.3 Full Hearing 24 14.4 Conduct of the Full Hearing 27 14.5 Disability Claims - Additional Procedures 27 Rule 15 - Confidentiality 15.1 Extent of Confidentiality Permitted 28 15.2 Requirement for Maintenance of Confidentiality 28 15.3 Confidentiality of Medical Records 29 Rule 16 - Interest Calculations 16.1 Interest Calculations 29 Rule 17 - Disability Review Procedure 17.1 Procedure 29 Rule 18 - Surveillance 18.1 Surveillance 30 Rule 19 - Insurance Premium Deductions 19.1 Insurance Premium Deduction Authorization 31 19.2 Tax -Free Payment of Insurance Premiums 32 00119050.WPD; 1 �(p J/ Table of Contents Page 4 19.3 Retirees Who are Eligible for the Tax -Free Payment of Qualified Insurance Premiums 33 00119050.WPD;1 �6 � RULE 1 BOARD OF TRUSTEES 1.1 DEFINITION OF FUNCTIONS The Board of Trustees shall act as the named fiduciary of the Fund as defined by Florida law. The Board shall have the exclusive authority to operate, maintain and interpret the provisions of the state laws and local ordinances establishing and executing the investment policy of the Fund. The Trustees shall be solely responsible for the selection and retention of professional advisors to the Fund including but not limited to investment managers, performance monitors, plan administrators, attorneys, accountants, actuaries, and clerical staff. 1.2 DEFINITION OF FIDUCIARY A fiduciary shall be defined as a person responsible for the discharge of his duties with respect to the Pension Plan solely in the interest of the participants and beneficiaries for the exclusive purpose of providing benefits to participants and their beneficiaries and defraying the reasonable expenses of administering the Plan. 1.3 SUMMARY Trustees shall be responsible for the investment and reinvestment of the assets of the Fund; for determining all claims for retirement benefits; for exercising the sole and exclusive adminis- tration of and the proper operation of the Plan; to perform such actuarial and accounting functions as are required by law; to prepare and distribute a Summary Plan Description as provided in § 112.66, Florida Statutes, to the Members of the Fund upon employment and every other year thereafter; and to fulfill all other such duties as may be required by law. 1.4 ESTABLISHMENT OF OFFICES The Board of Trustees shall elect a Chairman and Secretary every two years. The officers shall be Trustees of the Board. The Chairman shall be responsible for the conduct of all meetings of the Board and shall have voting rights the same as any other Trustee of the Board. The Chairman shall perform such other duties as the Trustees may assign. The Secretary shall be responsible for 00119050.WPD;1 -1- �j f I the keeping of minutes of the transactions of the Board. The Secretary, together with the Chairman, shall execute all official contracts of the Board. 1.5 CONFLICTS OF INTEREST AND GIFTS A. Conflicts of interest in voting shall be governed by the provisions of Section 112.3143, Florida Statutes, the Code of Ethics for Public Officials. Notwithstanding any other provision of law, no Trustee shall vote or participate in a determination of any matter in which that Trustee shall receive a special private gain except in the case of employee Trustees voting on benefits applicable to all Members of the Plan. B. No Trustee (or his or her spouse or minor child) shall, at any time, solicit or accept any gift (including but not limited to, food, beverages and transportation), loan, reward, promise of future employment, favor, service, compensation, payment, or thing of value when the Trustee understands, knows or should have known that it was given to influence a vote or other action in which the Trustee was expected to participate in his official capacity. Gifts provided directly or indirectly by a state, regional or national organization which promotes the exchange of ideas between, or the professional development of, members of that organization or staff of a governmental agency that is a member of that organization, are permitted. 1.6 PER DIEM AND REIMBURSEMENT All Trustees shall be entitled to receive a per diem allowance and reimbursement for reasonable expenses incurred in conducting the business of the Fund. The Board shall establish reasonable reimbursement rates in accordance with policies of the City of Sebastian, a copy of which is attached. 1.7 ELECTION PROCEDURES The Board of Trustees shall consist of five persons, two of whom shall be Police Officers, two of whom shall be legal residents of the City appointed by the City Council and the fifth Trustee shall be a person selected by the other four Trustees and appointed as a ministerial act by the City Council. 00119050.WPD;1 -2- A. Police Officer Trustees. The Police Officer Trustees shall be elected from among the Members of the Fund in the Police Department. Elections shall be by a majority vote. If no candidate receives a majority vote, a run-off election between the two top vote recipients shall be held at the earliest practical date. Elections shall be within sixty calendar days of a vacancy. Trustees shall take office immediately after election results are certified by the Board. In the event of a vacancy, elections shall be within sixty days of the vacancy. Employees shall be permitted to nominate themselves for office and elections maybe conducted by mail -in ballot. The election shall otherwise be conducted by placement of a ballot box in the Police Department Headquarters for a period of 72 hours beginning on a date to be selected by the Board. Ballots shall be counted by the Board and the winners certified by the Board. B. Resident Trustees. The two resident Trustees shall be legal residents of the City and shall be appointed for four year terms, by the City Council at the earliest practical date after a vacancy occurs. C. Fifth Trustee. The fifth Trustee of the Board shall be chosen for a four year term by a majority vote of the other Trustees at the earliest practical date after a vacancy occurs. The fifth Trustee may or may not be a legal resident of Sebastian and may or may not be an employee of the City. The name of the person selected by a majority of the other Trustees shall be certified to the City Council which shall, in accordance with state law, ratify the appointment of that person as a ministerial act. 1.8 SUCCESSION OF PERSONS TO VACANT POSITIONS Vacancies on the Board of Trustees of employee members shall be filled by special election to be conducted in the same manner as any other election. Vacancies among the resident Trustees shall be filled by the City Council . The person selected to fill a vacancy shall fulfill only the remaining term of the vacant office. In the event of a vacancy in the fifth Trustee of the Board, the Board shall appoint a successor in the same manner as the initial selection. 00119050.WPD;1 -3- 1.9 EDUCATION REQUIREMENTS Each Trustee is required to attend a seminar or conference regarding Trustee duties and responsibilities and matters relating to the investment program of the Plan at least once each term. Trustees are encouraged to attend seminars or conferences more frequently in order to remain informed regarding pension issues. New Trustees are encouraged to attend within the first six months of their term. Trustees shall be permitted to attend conferences or schools within the State of Florida to satisfy the above minimum requirements without prior Board approval. 1.10 DISCLOSURE OF FINANCIAL INTERESTS Trustees must file a statement of financial interests (Form 1) with the supervisor of elections of the county in which they permanently reside within 30 days from the date of appointment and no later than July 1 of each year thereafter. Trustees must file a final statement (Form 1F) within 60 days after leaving their office as Trustee. The final statement shall cover the period between January 1 of the year in which the Trustee leaves office and the last day of office. If a Trustee has not filed by July 1, the supervisor of elections is required to notify such Trustee of a grace period to file by September 1. If a statement is not filed by September 1, a fine of $25.00 per day will be imposed up to a maximum of $1500.00. Fines cannot be paid from the pension plan. The Trustee may also be subject to additional penalties provided for in §112.317, Florida Statutes. RULE 2 MEETINGS 2.1 ATTENDANCE AT BOARD MEETINGS The Board shall set its own schedule of meetings. Special meetings may be called by the Chairman or by a majority of Trustees. The Board shall meet at least once each quarter. In recognition of the importance of the work of the Board, regular attendance at Board meetings is expected of all Trustees. Physical attendance of a quorum is required at meetings in order for the Board to conduct business. Once the physical presence of a quorum is established, 00119050.WPD;1 -4- Trustees not physically present may participate telephonically if so noted on the meeting agenda. Trustees shall only be permitted to attend meetings of the Board by teleconferencing or telephone if extraordinary circumstances exist for the Trustee's absence, as determined by the Board, and only if a quorum (3) of the Trustees is physically present at the meeting. Trustees who are permitted to remotely attend meetings shall be permitted to participate and vote at such meetings. Any Trustee who fails to attend two consecutive meetings of the Board without an excuse acceptable to the other Trustees shall be deemed to have resigned from the Board. Employee Members of the Fund who are called into the active service of the City at the time of a Board meeting shall automatically be deemed excused. 2.2 AGENDAS AND OTHER MEETING MATERIALS A published Notice of Meeting and Agenda shall be prepared for each regular and special meeting of the Board. The Notice of Meeting and Agenda shall set forth those items upon which the Board anticipates taking action or discussing. Each agenda item shall have attached to it backup material necessary for discussion or action by the Board. Each Notice of Meeting and Agenda shall inform members of the public that should they wish to appeal any decision made by the Board that they will need a record of the proceedings and that they may need to ensure a verbatim record is taken, which includes testimony and evidence upon which the appeal is based. In addition, the Notice of Meeting and Agenda shall also include a notice to members of the public offering to provide assistance to those who are disabled, should they need assistance in order to attend the meeting. A copy of the Notice of Meeting and Agenda shall be posted in a location in the Sebastian City Hall and the Police Department where notices of public meetings are customarily posted. The Board must provide and post reasonable notice of all meetings. All agendas and meeting materials are public records as defined in Chapter 119, Florida Statutes. 2.3 RULES OF ORDER In recognition of the importance of accomplishing the objectives of the Board in a most orderly fashion, the Board may establish rules of order for the conduct of its meetings. The Board 00119050.WPD;1 -5- 6141 shall not, however, be bound by strict observance of the rules of parliamentary procedure unless the Board deems it in its best interest to do so. Three affirmative votes are required to carry action. 2.4 APPEARANCE BEFORE THE BOARD As a public body, the Board has a responsibility to accommodate members of the public and Members of the Fund who wish to appear before the Board. All appearances before the Board shall be scheduled through the Plan Administrative Assistant and time limits for presentations may be established by the Board. Appearances before the Board may be in person or through a repre- sentative. All communications with the Board shall either be in writing or by personal appearance at a Board meeting. 2.5 PUBLIC RECORDS A. The records of the Fund are public records as set forth in Chapter 119, Florida Statutes, except for medical records of the Fund. The Board shall maintain the confidentiality of medical records as required by law. All medical records of Members of the Fund shall be maintained separately from other records of the Board so as to ensure security of the privileged information to which the Board is privy. B. The Board shall appoint a Records Management Liaison Officer (RMLO) in accordance with Section 257.35, Florida Statutes. The RMLO shall be the official custodian of the records of the Board. The Board shall adopt the Florida General Records Schedule GS1-SL, as amended from time to time, and shall maintain an active and continuing program for the economical and efficient management of Board records. 2.6 GOVERNMENT IN THE SUNSHINE All meetings of the Board shall be conducted in accordance with the provisions of Section 286.011, Florida Statutes, the Government in the Sunshine Act. No Trustee shall engage in communications with another Trustee outside of a public meeting on any matter which shall ultimately be the subject of a Board action. All meetings of Trustees at which official business of the Board shall be discussed shall be publicly noticed and open to the public in accordance with the 00119050. WPD; 1 -6- law. All meetings of the Board shall be held in a location where public access is reasonably available. Regular meetings of the Board shall be held in Indian River County, Florida. 2.7 COMMITTEE MEETINGS The Board, in the conduct of its business, may choose to establish committees consisting of a lesser number of Trustees. Committees shall be appointed by the Chairman. Committees consisting of two or more Trustees shall be conducted in accordance with the Government in the Sunshine Law. Committees consisting of one Trustee shall maintain records in accordance with the Public Records Act but need not conduct its business pursuant to a publicly noticed meeting. All reports of committees shall be reduced to writing and made a part of the official records of the Board. 2.8 WORKSHOPS The Board may from time to time wish to conduct workshop meetings for the purposes of developing policies or procedures of the Board or for the review of investment data of the Board. Workshops shall be conducted in a public forum the same as any other meeting and shall have a published agenda in advance of the workshop. 2.9 MINUTES Complete minutes of all meetings of the Board or a Committee shall be promptly prepared following the meeting and all minutes shall be submitted to the Board for approval following their preparation. All minutes shall be open for public inspection. RULE 3 RULES OF PROCEDURE 3.1 LEGAL EFFECT The Board of Trustees is authorized by law to establish rules of procedure for the operation of the Fund. No rule or regulation of the Fund may conflict with any lawful ordinance, charter provision or state law. 00119050.WPD;1 -7- r- 0 -/3 3.2 ADOPTION PROCEDURES All rules to be adopted by the Fund shall be in writing and shall be adopted by a majority vote of the Board. The Board shall review its rules and regulations on a periodic basis but not less than once a year. The rules and regulations of the Fund shall be made available to any member of the Fund requesting a copy from the Plan Administrator. RULE 4 PLAN ADMINISTRATIVE ASSISTANT/OFFICE PERSONNEL 4.1 BOARD EMPLOYEES/INDEPENDENT CONTRACTORS The Board shall establish specific job descriptions for each classification of service provided to the Board. New employees and independent contractors of the Board shall not, by virtue of their employment by the Board, be employees of the City of Sebastian and shall serve at the pleasure of the Board. 4.2 SELECTION STANDARDS The Board shall establish for each classification of service, standards of education, experience and skills necessary for the execution of the duties of the position. The Board may delegate the initial screening process for applicants to a committee of the Board. The final decision for the employment of any person as an employee or independent contractors shall be determined by the Board of Trustees acting as a whole. 4.3 EVALUATION AND COMPENSATION All employees and independent contractor of the Board shall be evaluated periodically. Compensation shall be established by the Board of Trustees. 4.4 DECISION MAKING AUTHORITY No employee or independent contractor of the Board shall have the authority to bind the Board of Trustees in any contract or endeavor without the express authority of the Board. 00119050.WPD;1 -8- �r� - RULE 5 INTERNAL PROCEDURES AND CONTROLS 5.1 MAIL The Administrative Assistant of the Board shall be responsible for opening, dating and transmitting mail. All mail received by the Board shall be dated, stamped and reviewed for any time limitations or response dates. The mail shall be placed in folders bearing the names of the recipient of the mail. Mail addressed to the Board in general and to no specific person shall be directed to all Trustees. All official decisions of the Board shall be sent by mail. A "reading file" of all correspondence coming into and emanating from the Board shall be maintained on a monthly basis together with copies in any specific files as may be established. In all respects, the provisions of Chapter 119, Florida Statutes, the Public Records Act, shall be observed. 5.2 EXPENSE PAYMENTS FROM THE FUND A. Payments to professionals performing services previously authorized by the Board or for other expenses authorized by the Board shall routinely be made prior to Board approval as follows: (1) Statements received for services or expenses which are not pursuant to a written agreement shall be paid, but only if such statements do not exceed $250.00. (2) Statements received for services or expenses which are rendered pursuant to a written agreement shall be paid if deemed to be in accordance with the agreement. All payments made pursuant to paragraphs (1) and (2) above shall be considered by the Board at the first meeting following such payment and approved and ratified, if appropriate. B. Any other payments from the Fund not described in subsection A. above shall be approved by the Board prior to such payment. C. Authorization for payments from the Fund shall be in writing and signed by at least two trustees of the Board, or by the Administrative Assistant. 00119050. WPD; 1 -9- 5.3 PROCESSING OF PAYMENTS FOR EARLY OR NORMAL RETIREMENT AND RETURN OF CONTRIBUTIONS A. Upon receipt of an application for early or normal retirement, the Board's Administrative Assistant or other Board designee shall process the application as follows: (1) The application shall be reviewed for accuracy and completeness and for eligibility for benefits. (2) A copy of the application and any necessary records from the City shall be forwarded to the actuary for calculation of the benefit amounts payable for the normal form and all optional forms of benefits. (3) Upon receipt of the actuary's calculations, the calculations shall be presented to the Retiree and the Retiree shall make his election. (4) The application shall be approved by any Administrative Assistant and shall then be provided to the Custodian along with any necessary supporting documents in order to begin payments. (5) Copies of the Retiree's election form and the actuary's calculations shall be provided to the Board of Trustees or Administrative Assistant prior to the commencement of payments or at the next meeting immediately following the commencement of payments, and the Board shall review and approve the retirement benefits. B. Upon the termination of employment of a Member prior to his early or normal retirement date, the Board's Administrative Assistant or other Board designee shall: (1) Determine whether the Member is vested or not vested and determine the amount of the Member's contributions. (2) Inform the Member of his right to leave his contributions in the plan or withdraw his contributions. If the Member desires to withdraw his contributions, provide the Member with the necessary forms, including the appropriate Return of Contributions form, the Special Tax Notice Regarding 00119050.WPD; 1 -10- Cb - / (0 Plan Payments and the Certification of Receipt of the Special Tax Notice and the Lump Sum Distribution Election Form; (3) Recommend that the Member study and complete the appropriate forms and seek tax and/or legal advice regarding his choice. (4) Direct the Member to return the completed forms to the Administrative Assistant or Board designee; (5) Upon receipt of the properly completed forms, prepare and submit a payment request signed by the Administrative Assistant and copies of any necessary documents to the Custodian to authorize the requested payment or rollover; (6) Provide copies of all documents to the Board of Trustees prior to payment or at the next meeting immediately following the payment, for the Board to approve the payment. C. Pension payments should only be made as provided above. 1099-R reporting forms to Retirees must contain the proper information and codes to ensure that Retirees report the proper amounts on their personal income tax returns. In -line -of duty disability benefits shall be reported as "taxability undetermined" on 1099-R forms. 5.4 REVIEW OF CUSTODIAL STATEMENTS A. Custodial reports should be monitored by the Board or its designee for disclosure of all asset inflows such as City and Member contributions, state excise tax payments, if applicable, miscellaneous citizen donations, and investment income. All errors, including those involving the misclassifications ofPlan revenues, e.g., recording Member contributions as City contributions, must be corrected. B. Custodial reports should also be monitored for all asset outflows. Asset outflows must be properly approved and verified on audit. Expenses shall be approved as provided in Rule 5.2 and Retirements and Returns of Contributions in accordance with Rule 5.3. Letters of authorization for the expenditure of funds must be issued by the Administrative Assistant and copies must be maintained in orderly files. 00119050.WPD; 1 5.5 ROLLOVERS TO AND FROM THE FUND The Fund will accept and transfer eligible cash rollover distributions to and from the Fund as permitted by local, State and Federal law. The Board may adopt appropriate forms to facilitate such rollovers. RULE 6 INSURANCE 6.1 FIDUCIARY INSURANCE The Trustees are authorized by law to purchase fiduciary insurance to insure members of the Board for breaches of fiduciary duty at the expense of the Fund, but the Fund shall not pay to waive recourse against Trustees. A rider waiving recourse may be purchased and paid for by the City or by a Trustee. 6.2 TRAVEL COVERAGE The fund may purchase, at its expense, life and accidental death and dismemberment insurance for each Trustee who shall travel outside of Indian River County for the purpose of Board related business. RULE 7 RELATIONS WITH THE CITY 7.1 AUTHORITY OF THE BOARD The Board of Trustees is an independent entity established by state law, city charter and local ordinance. The Board of Trustees shall not be considered a component part of nor subordinate to the City of Sebastian government. The Board shall have exclusive control of the operation of the Fund; however, no change to the retirement ordinance may be made except by action of the State Legislature or the City Council . 7.2 CONTRACTUAL SERVICES In the selection of contractual services, the Board shall pay particular attention to the existence of conflicts of interest when contractors are to be employed by the Board for services similar to services which the contractor also provides to the City of Sebastian. 00119050.WPD;1 -12- 6� 1 F 7.3 USE OF THE CITY AS CUSTODIAN The Board shall be authorized to utilize the services of the City for the performance of banking functions of the Board. The City shall have no discretionary authority with regard to the utilization or direction of funds of the Board. The precise duties of the City shall be reduced to writing, the same as any other contract for services entered into by the Board. 7.4 USE OF INDEPENDENT CUSTODIANS The Board shall be authorized to use the services of any duly qualified custodian in lieu of the City for the performance of banking functions of the Board. The custodian shall be duly licensed, insured and bonded and shall meet all of the depository requirements of Chapter 280, Florida Statutes. 7.5 ADMINISTRATIVE SERVICES The Board shall be authorized to utilize the City for the performance of administrative services. The precise duties shall be reduced to writing, the same as any other contract for services entered into by the Trustees. RULE 8 ORDINANCE CHANGES 8.1 FORM OF ORDINANCE No ordinance change affecting the Pension Fund shall be presented for a vote to the City Council unless first reviewed and approved by a majority of the Trustees in accordance with the existing law governing the Fund. All proposed ordinances shall be reviewed by the General Counsel to the Fund who shall pass on the form and correctness of the ordinance. All proposed ordinance changes carrying an economic impact shall be reviewed by the actuary to determine the cost as required by law. 8.2 COLLECTIVE BARGAINING The Board of Trustees acknowledges that it is neither an employee organization nor an employer as defined by Chapter 447, Part 11, Florida Statutes. Therefore, the Board shall not engage in collective bargaining on behalf of the City of Sebastian or on behalf of any employee organization. 00119050.WPD;1 -13- The Board shall make itself available as a resource to labor organizations and the City for all matters relating to pension and retirement, if any. 8.3 APPEARANCE AT CITY COUNCIL MEETINGS The Board of Trustees shall, through one of its members, its designee or its General Counsel, be present at all City Council meetings where a discussion of matters of interest to the Board shall occur. The Board shall, prior to said meeting, designate an official spokesperson on behalf of the Fund. 8.4 ACTUARIAL IMPACT STUDIES No benefit change shall occur without an actuarial impact study as required by state law. Actuarial impact studies initiated by the Board of Trustees shall be at the expense of the Fund. Actuarial studies requested by the City or the Union, if any, previously authorized by the Board shall be paid for by the City or Union, respectively. RULE 9 JUDICIAL PROCEEDINGS 9.1 PROCESS All process issued by federal or state courts to the City of Sebastian concerning the Pension Fund or to the City of Sebastian Police Officers' Retirement System shall immediately upon receipt, be forwarded to the General Counsel for the Fund who shall respond thereto. 9.2 DISSOLUTION OF MARRIAGE Upon entering into a Dissolution ofMarriage, a Plan Member shall notify the Administrative Assistant of the Member's attorneys name, address and telephone number. The Administrative Assistant shall then promptly provide that information to the General Counsel to the Fund. RULE 10 INVESTMENTS 10.1 HIRING INVESTMENT MANAGERS In recognition of the importance of professional guidance in the investment of the assets of the Fund, all investments shall be performed by qualified, professional investment managers. The 00119050.WPD;1 -14- (:-�6 2a investment managers shall be selected at a regular or special meeting of the Board of Trustees by a majority vote of the Board. The Board may delegate the initial screening of investment managers to a committee of the Board but no final decision shall be made except at a meeting of the Board. All proposals for investment manager services shall be presented in writing to the Board and shall be made a part of the records of the Board. 10.2 HIRING PERFORMANCE MONITORS The Board shall engage at all times, at least one performance monitor who shall be responsible for reviewing the performance of the various investment managers of the Fund. The performance monitor shall report to the Board on such time schedules as the Board shall establish but not less than annually. The performance monitor shall advise the Board as to the relative performance of each investment manager as compared to the various stock, bond and cash indices as are generally accepted in the investment market place as reflective of satisfactory investment performance. The performance monitor shall recommend in writing to the Board the retention or discharge of investment managers and the reasons supporting its recommendation. At the request of the Board, the performance monitor may perform evaluation and searches for investment managers and such other services as the Board shall request be performed. 10.3 PERFORMANCE GOALS AND OBJECTIVES The Board shall establish performance goals and objectives for each investment manager in each class of investment and shall establish expected rates of return. The investment policy shall comply with the minimum requirements set forth in Section 112.661, Florida Statutes. The perform- ance goals and objectives shall be reduced to writing in an Investment Policy Statement and shall be referred to in the contract between the Board and the manager. The performance goals and objectives shall be reviewed on not less than an annual basis and shall be compared to the actual performance of an investment manager to determine compliance with the goals and objectives set by the Board. All Investment Policy Statements and amendments thereto shall immediately be provided to the City, the Department of Management Services and to the Board's actuary. 00119050.WPD;1 -15- 10.4 INVESTMENT STANDARDS The Board shall establish written investment standards in the Investment Policy Statement. The standards shall set forth the distribution of the Fund between equities, fixed income, cash and cash equivalents and other forms of lawful investment. The standards shall set forth the relative percentages of the Fund to be distributed to each investment vehicle and shall establish permissible risk factors. Each investment manager shall subscribe to the Investment Policy Statement setting forth the written investment standards and performance goals and objectives of the Fund and the Investment Policy Statement shall be incorporated into each investment manager contract by reference. 10.5 DECISION MAKING AUTHORITY The Board of Trustees shall determine the retention or discharge of any investment manager or performance monitor. The Board shall also establish the amount of funds to be entrusted to any investment manager and shall determine when funds shall be withdrawn and investments terminated. The Trustees shall not, however, participate in the selection of individual stocks, bonds or cash funds as that shall be the responsibility of the investment manager within the context of the performance goals and objectives and investment standards established by the Board. 10.6 WRITTEN CONTRACTS Each investment manager shall enter into a written contract with the Board. Each contract shall include an acknowledgment by the investment manager that it is familiar with the ordinances of the City of Sebastian and the provisions of Chapters 112 and 185, Florida Statutes. The contracts shall also provide that the investment manager shall make no purchases which are prohibited by law and in the event such purchase is made, shall make the Fund whole for any loss incurred in the divestiture of said investment. Each contract shall set forth with specificity the fees charged by the investment manager to the Fund. All investment manager contracts shall further set forth that the investment manager is registered as an investment advisor and is otherwise qualified by law to engage in the management of the assets which are the subject of the contract. 00119050.WPD;1 -16- C� —a 10.7 REPORTING All investment managers and performance monitors of the Fund shall report on not less than an annual basis. The investment managers and monitors may, however, be directed by the Trustees to report on a more frequent basis. All such reports shall be in writing and shall be presented in person by a representative of the investment manager or performance monitor who has authority to make discretionary decisions with regard to the Trust's account and to settle claims and disputes arising from the contract. All such investment managers and performance monitors shall make these presentations in person at a regular meeting of the Board and shall bear their own costs and expenses in traveling to Board meetings. The performance monitors shall attend at least an annual meeting of the Board and shall report, in writing, the progress of each investment manager. The performance monitor shall also make written recommendations regarding retention of investment managers and changes in investment policy. 10.8 PRESENTATIONS BY PROSPECTIVE CONSULTANTS AND PROFESSIONALS In recognition of the limited time resources of the Board, presentations of prospective investment managers, performance monitors, custodians or other prospective professional advisors shall only be by written invitation of the Board. The Board shall maintain records of such prospective managers, monitors, custodians and other professionals to be reviewed by the Board in the event the Board wishes to consider adding or making a change in its current manager, monitor, custodian or other professional. In the event the Board elects to consider retaining a new manager, monitor, custodian or other professional, prospective applicants, including those applicants who had previously provided information to the Board, may be contacted and provided with a Request for Proposal. The Board or a committee appointed by the Board may conduct the initial screening of applicants by reviewing the proposals received in response to the Requests for Proposals. The Board may then schedule personal presentations by a "short-list" of qualified applicants. The Board may also decide to retain managers, monitors, custodians and other professionals by utilizing any other method which the Board deems to be prudent under the circumstances. 00119050.WPD;1 -17- 10.9 DIVESTITURE No divestiture of any asset of the Fund shall be made for any reason other than fulfillment of the fiduciary obligations of the Fund, or compliance with State Law. 10.10 PROXY VOTING The Trustees shall be responsible for exercising all proxies on equities held by the Fund. The Trustees shall comply on a voluntary basis with the standards of the Employee Retirement Income Security Act of 1974 in the voting of proxies. The Board shall, by contract or other written agree- ment, give all investment managers proxy voting responsibility and the Trustees shall monitor the voting of the managers. The Trustees (along with the United States Department of Labor) do not consider the following practices by investment management firms with proxy voting responsibility to be consist- ent with their fiduciary responsibility: A. Declining to vote proxies; B. Voting proxies exclusively for management without analysis of the underlying issues; C. Permitting negligent or inaccurate record -keeping regarding proxy voting; D. Accepting directions from other parties; E. Permitting the absence of policies or procedures to assure the proper exercise of this fiduciary responsibility. Any significant proxy items and the vote by an investment manager shall be reported in writing to the Trustees. Records of all proxy votes shall be maintained and made available to the Trustees or any agents acting in their behalf. All such records shall be maintained in accordance with the Florida Public Records Act. It shall be the primary responsibility of investment managers acting on behalf of the Board to vote all proxies to enhance the value of the Fund assets. All tender offers shall be treated in the same manner with regard to record -keeping and asset enhancement. 00119050.WPD;1 -18- 10.11 DECLARATION OF EXPECTED ANNUAL RATE OF RETURN For each actuarial valuation, the Board shall seek the advice of its investment professionals and the actuary and then the Board shall determine the total expected annual rate of investment return for the current year, for each of the next several years and for the long term thereafter. This determination must be filed promptly with the Department of Management Services, with the City and with the Board's actuary, as well as posted to the City website. 10.12 INVESTMENT REPORTS TO THE CITY The Board shall prepare annual fiscal year end reports for submission to the City, City Council, which shall include the investments in the portfolio by class or type, book value, income earned and market value as of the end of the fiscal year. RULE 11 ACTUARIAL SERVICES 11.1 SELECTION The Board of Trustees shall retain at all times the services of an enrolled actuary. An enrolled actuary shall mean an actuary who is enrolled under Subtitle C of Title III of the Employment Retirement Income Security Act of 1974 and who is a member of the Society of Actuaries or the American Academy of Actuaries. Competitive bidding shall not be required in the selection of actuaries. 11.2 CONFLICTS OF INTEREST In order to avoid conflicts of interest in the delivery of actuarial services, the Board shall not retain actuaries who are employed by the City of Sebastian, unless the Board is determined to be the client by a separate engagement letter or contract. 11.3 REPORTING The actuary shall report to the Board on not less than an annual basis so that the Board may establish the adequacy of employer and employee contribution rates. Valuations shall be done at least every three years and posted to the City website. No proposed change in retirement benefits 00119050.WPD;1 -19- ��-ate shall be made without an actuarial determination of the cost impact of the change. All actuarial reports shall be in accordance with the provisions of Section 112.63, Florida Statutes. 11.4 SETTING CONTRIBUTION RATES Pursuant to the ordinances of the City of Sebastian, the Board is solely responsible for establishing the contribution rates of the City. The City contribution rate shall be established following an analysis of the adequacy of employee contributions, contributions from the State of Florida Insurance Rebate Program and investment earnings of the Fund. 11.5 CREDITED SERVICE For purposes of actuarial calculations involving credited service, fractional parts of years shall be defined as completed months. 11.6 ACTUARIAL STUDIES FOR INDIVIDUAL PLAN MEMBERS Each vested Plan Member shall be entitled, at the Fund's expense, to receive two actuarial studies to estimate his or her retirement benefits. Any additional studies shall be provided only at the Member's expense. Benefit calculations for terminated vested persons shall be performed by the actuary immediately upon termination. RULE 12 ACCOUNTING SERVICES/ADMINISTRATIVE BUDGET 12.1 AUDITS The Fund shall cause to be made not less than on an annual basis an audit of the assets and liabilities of the Fund. Financial reporting should be made in accordance with generally accepted accounting standards. A. All postings from the custodial statements to the Plan's working trial balance should be in accordance with the Board's general and/or specific authorizations. B. All transactions recorded in the custodial statements should be analyzed, summarized and accurately posted to the correct trial balance accounts in the correct time period. C. All adjustments, deductions or write-offs of account balances should be calculated, summarized and recorded in the correct period. 00119050.WPn;1 -20- C/4 _ a D. All postings to the working trial balance should be supported by and reference to adequate, authorized documentation. 12.2 CONFLICTS OF INTEREST In order to avoid conflicts of interest, the Board shall not retain auditors who are employed by the City of Sebastian unless the Board shall be determined to be the client by separate engagement letter or contract. 12.3 REVIEW OF INTERNAL CONTROLS The policies and procedures provided for in these Operating Rules and Procedures shall be reviewed by the independent certified public accountant as part of the financial audit to determine the effectiveness of such controls to prevent losses of funds which might arise from fraud, error, misrepresentation by third parties, or imprudent actions by the Board or employees of the City. 12.4 DETAILED ACCOUNTING REPORT The Administrative Assistant shall provide a detailed accounting report of its expenses for each fiscal year to the City and the Department of Management Services and make the report available to each member of the plan, and post the report on the Board's website, if the Board has a website. The report must include all administrative expenses that, for purposes of this subsection, are expenses relating to any legal counsel, actuary, plan administrator, and all other consultants, and all travel and other expenses paid to or on behalf of the members of the Board of Trustees, or anyone else on behalf of the plan. 12.5 ADMINISTRATIVE BUDGET The Board of Trustees shall adopt and operate under an administrative expense budget for each fiscal year. The Administrative Assistant shall provide a copy of the approved budget to the City, and make available a copy of the budget to plan members before the beginning the fiscal year. If the Board of Trustees amends the administrative expense budget, the Administrative Assistant must provide a copy of the amended budget to the City and make available a copy of the amended budget to plan members. 00119050.WPD;1 -21- �� RULE 13 LEGAL SERVICES 13.1 SELECTION The Board shall select and appoint a General Counsel who shall be licensed to practice law in the State of Florida. The General Counsel shall have demonstrated competence in the area of public employee retirement systems in the State of Florida and shall have been practicing law for not less than ten years. Competitive bidding is not required in the selection of legal services. 13.2 CONFLICTS OF INTEREST In recognition of the requirement that attorneys be independent in their judgment as set forth in the Code of Professional Responsibility, no attorney may serve as General Counsel who is also performing legal services on the part of the City of Sebastian or who otherwise engages in any legal services which the Board deems to be in conflict with its interests. 13.3 CITY OF SEBASTIAN CITY ATTORNEY In recognition of the responsibilities of the City Attorney to the City of Sebastian and the potential for representing competing interests, the office of the City Attorney may not serve in any legal capacity on the part of the Trust. 13.4 PRIVILEGED COMMUNICATIONS In all dealings between its General Counsel and the Board, the Board shall be deemed the client rather than any individual Trustee of the Board. All communications between the Board and its General Counsel shall be privileged communications except where otherwise governed by the Government in the Sunshine Law. 13.5 AUTHORITY TO DIRECT The General Counsel shall take direction from the Board of Trustees as may be given at the various meetings of the Board. In between meetings of the Board, direction to the General Counsel shall be given by the Chairman or other person directed by the Board. All files of the General Counsel to the Fund shall be open for inspection by any Trustee. 00119050.WPD; 1 -22- C/ ),W 13.6 CONTRACTS If possible, all contracts shall provide that the laws of Florida shall govern and that venue for any legal action shall be in Indian River County, Florida. In no event shall any contract be terminable by the service provider with less than 45 days' written notice, unless otherwise agreed to by the Board. All written contracts shall be reviewed by the General Counsel to the Fund who shall approve the form and correctness of each such contract. All written contracts shall be executed by the Chairman and Secretary of the Board. RULE 14 CLAIMS PROCEDURES 14.1 CLAIMS OF AFFECTED PERSONS A. The Board of Trustees shall grant an initial hearing upon receipt of a written request ("Claim"), on matters which affect the substantial rights of any person ("Claimant"), including Members, Retirees, Beneficiaries, or any person affected by a decision of the Board of Trustees. B. The Board shall review the Claim at an initial hearing and enter an order within a reasonable time from the date of receipt of the Claim. In determining a reasonable time period for setting the initial hearing, the actions required for the collection of records and in the case of a disability claim, receipt by the Board of a written medical release authorization in a form approved by the General Counsel, a completed set of interrogatories prepared by the General Counsel and provided to the Claimant, and the gathering of medical records necessary to process the claim shall be considered. C. It shall be the function of the General Counsel, throughout the claims procedure, to assist the Board in the discovery and presentation of evidence in order to assure that the Board receives all relevant information prior to the Board's decision. D. The Claimant shall have the right to be represented by counsel at any or all times throughout the claims procedure. 00119050.WPD;1 -23- t6 - �i 14.2 INITIAL HEARING A. At the initial hearing, the only evidence to be considered by the Board shall be documentary evidence contained in the pension file, including but not limited to, correspondence, medical records and reports of treating physicians and/or examining physicians and information received pursuant to paragraph B. B. Other than questions from the Trustees, there will be no taking of additional evidence at the initial hearing, except that the Claimant will be afforded 15 minutes to make a presentation, which shall be limited to comments and/or arguments as to the evidence or information already contained in the pension file, including the report of the examining physician. C. Upon completion of the review of the Claim at the initial hearing, the Board shall enter an order setting forth its findings and conclusions on the Claim. The written order shall be provided to the Claimant. The order shall include: (1) . The specific findings and conclusions of the Board, including specific references to pertinent provisions of the Plan on which such conclusions are based; (2) A description of any additional material or information that the Board may deem necessary for the Claimant to perfect his Claim, together with the reasons why such material or information is necessary; and (3) An explanation of the right to a full hearing on the Claim and the time limit in which a full hearing must be requested in writing. D. The decision of the Board at the initial hearing shall not be final until after the time has expired to request a full hearing or, if a full hearing is requested, until the Board makes a decision at the conclusion of the full hearing. 14.3 FULL HEARING A. Any Claimant may request a full hearing on the issues presented to the Board at an initial hearing and upon which the Board has entered an order as provided in subsection 2.C. above. 00119050.WPD;1 -24- B. A full hearing must be requested by the Claimant within thirty (30) days of the receipt of the Board's order. The order will be deemed received three (3) days following the date it is mailed to Claimant at the address provided to the Board by Claimant. C. Upon receipt of the request for a full hearing and considering the amount of discovery which might be conducted, the Board shall establish a date for the full hearing and cause notice to be given to the Claimant. The full hearing may be postponed, if necessary and with the consent of the Claimant, to permit full discovery of the facts. D. Copies of all documents to be offered into evidence at the full hearing, including depositions, and a complete witness list with names and addresses of witnesses expected to be called, shall be furnished to the Board and the General Counsel by the Claimant at least 20 days prior to the full hearing. Documents not furnished to the Board within the prescribed time limit maybe excluded from evidence at the full hearing if a reasonable explanation is not provided for the delay in providing the documents. E. A Claimant or the General Counsel may obtain discovery by deposition and/or interrogatories prior to the full hearing. Written notice of any depositions and/or interrogatories shall be given to the General Counsel and the Claimant. F. The costs of any discovery, except discovery requested by the Board or the General Counsel, the appearance of witnesses at the hearing, and the making of a verbatim record of the proceedings shall be the responsibility of the Claimant. G. The Claimant shall be responsible for the appearance of any witnesses which the Claimant wishes to have testify at the hearing. The Board shall, however, have the power to subpoena and require the attendance of witnesses and the production of documents for discovery prior to and at the proceedings provided for herein. The Claimant may request in writing the issuance of subpoenas by the Board. A reasonable fee may be charged for the issuance of any subpoenas not to exceed the fees set forth in Florida Statutes. H. Testimony at the full hearing may be submitted in the form of a deposition. Depositions timely submitted will be part of the record before the Board at the full hearing and will 00119050.WPD;1 -25616-31 - not be read in totality at the full hearing; provided however, that this does not preclude the Claimant or the General Counsel from reading parts of depositions in an opening or closing statement. I. Irrelevant and unduly repetitious evidence shall be excluded. J. Any person who knowingly gives false testimony is guilty of a misdemeanor of the first degree, punishable as provided in Section 775.082 or 775.083, Florida Statutes. K. The file maintained by the Board, including but not limited to various medical reports therein, is part of the record before the Board at the full hearing L. All proceedings of the Board shall be conducted in public. M. In cases concerning an application for pension benefits, including applications for disability retirement benefits, the burden of proof, except as otherwise provided by law, shall be on the Claimant seeking to show entitlement to such benefits. N. In cases concerning termination of pension benefits, including re-examination of Retirees receiving disability retirement benefits, the burden of proof shall be on the Board. O. Except as to those records which are exempted from the provisions of Chapter 119, Florida Statutes, Florida's Public Record Law, records maintained by the Board are open for inspection and/or copying during normal business hours at a reasonable cost for the copying. P. Should a Claimant requesting an initial or full hearing decide to appeal any decision made by the Board, with respect to any matter considered at such hearing, the Claimant requesting an initial or full hearing will need a record of the proceedings and may need to assure that a verbatim record of the proceeding is made. The Claimant requesting an initial or full hearing will be responsible for obtaining a court reporter or otherwise making a record of the proceedings before the Board. Q. The decisions of the Board after the requested full hearing shall be final and binding. R. After making a decision at the full hearing, the Board shall enter a final order setting forth its findings and conclusions and a copy of the order shall be provided to the Claimant. S. Judicial review of decisions of the Board shall be sought by the filing of a timely petition for writ of certiorari with the Clerk of the Circuit Court, in the appropriate county. 00119050.WPD;1 -26- 14.4 CONDUCT OF THE FULL HEARING A. The Chairman shall preside over the hearing and shall rule on all evidentiary, procedural, and other legal questions that arise during the hearing. The Chairman's rulings shall stand unless overruled by a majority of the Trustees present. The Chairman shall open the full hearing by explaining the procedures to be followed. B. The Claimant shall have the right to be represented by counsel or be self -represented. The General Counsel shall advise the Board. C. The Claimant shall be allowed to make an opening statement not to exceed ten mmutes. D. Testimony of witnesses shall be under oath or affirmation. Depositions and affidavits shall be admissible. E. The Chairman, any Trustee, the General Counsel, the Claimant or the Claimant's counsel, upon recognition by the Chairman, may direct questions to any witness during the proceedings. F. Either the Claimant or the General Counsel shall have the right to present evidence relevant to the issues, to cross-examine witnesses, to impeach witnesses and to respond to the evidence presented. G. The Claimant shall be permitted a closing argument not to exceed 15 minutes. H. The Board shall deliberate and make a decision following closing argument and thereafter enter an order as provided herein. 14.5 DISABILITY CLAIMS - ADDITIONAL PROCEDURES A. All applications for disability pensions shall be in writing. Forms for such applications may be provided by the Board. B. Upon receipt of the application for disability, the General Counsel will provide the Claimant with a set of interrogatories or questions to be answered under oath and a medical release authorization. Both documents will be completed by the Claimant and returned to the General Counsel. 00119050.WPD; 1 -27- C6 - 33 C. Upon receipt of the properly completed interrogatories and medical release authorization, the General Counsel will request medical records from all relevant treating physicians; personnel records from the employer, copies of relevant workers' compensation records, and copies of other records deemed to be relevant to the Claim. The Board shall pay, from the Fund, the cost of any medical examinations required by the Board and for copies of medical records. D. The General Counsel will, if authorized by the Board, upon receipt of the medical records from the treating physicians, schedule an independent medical examination (IME) or examinations with an appropriate independent examining physician or physicians who will be asked to render an opinion about Claimant's physical condition as it relates to the claimed disability. E. Upon receipt of the WE report or reports from the examining physician or physicians, the General Counsel will provide all records of treating physicians, relevant workers' compensation claims records, the independent medical evaluation, and all other relevant documents to the Board for inclusion in the pension file and the Board shall then schedule the initial hearing. RULE 15 CONFIDENTIALITY 15.1 EXTENT OF CONFIDENTIALITY PERMITTED § § 119.071(4)(d)2. a. (I) and (II), Florida Statutes, provides that the home addresses, telephone numbers, social security numbers, photographs and dates of birth of active or former sworn law enforcement personnel and; the names, home addresses, telephone numbers, social securitynumbers, photographs, dates of birth and places of employment of the spouses and children of such personnel; and the names and locations of schools and day care facilities attended by the children of such personnel are exempt from the public records provisions of Section 119.07(1), Florida Statutes. 15.2 REQUIREMENT FOR MAINTENANCE OF CONFIDENTIALITY The Board will maintain the information specified in 15.1 as confidential, if it receives from a Member or the City of Sebastian a written request to maintain confidentiality. 00119050. WPD; 1 -2866 - 15.3 CONFIDENTIALITY OF MEDICAL RECORDS A. § 112.08(7), Florida Statutes is an exemption of medical records and medical claims records from the public records requirements of § 119.07(1), Florida Statutes and such records are thus confidential. B. This exemption provides that the Board shall not furnish such records to any person except the employee or his legal representative without written authorization from the employee or, unless otherwise prohibited by law, it receives a subpoena issued in a civil or criminal action from a court of competent jurisdiction where the party seeking the records gave proper notice to the employee or his legal representative. C. Since, under Government in the Sunshine, trustees can only discuss issues involving medical records of an employee in a public meeting, such an authorization should be signed by an employee prior to discussion by the Board. Upon consideration of the medical records at a public Board meeting, such records then become subject to disclosure in the same manner as any other public record. RULE 16 INTEREST CALCULATIONS 16.1 INTEREST CALCULATION To the extent permitted by law, the interest calculation for the purchase of Credited Service, if not otherwise provided for in the ordinance, shall be the greater of the actual interest earned on plan investments or the actuarially assumed rate of investment return. RULE 17 DISABILITY REVIEW PROCEDURE 17.1 PROCEDURE The Board shall periodically review the status of disability Retirees who may be eligible to return to employment with the City of Sebastian as a Police Officer in accordance with the following: 00119050_WPD;1 -29- / A. A disability affidavit on a form adopted by the Board shall be filed with the Board at least once each year. Failure to file the affidavit shall result in a suspension of disability benefits. B. Upon receipt of the affidavit, the Board shall determine whether the disability Retiree continues to be entitled to receive disability benefits pursuant to the terms of the pension plan. C. If the Board determines that the disability Retiree is still disabled, then disability benefits shall continue to be paid. D. If, after review of the affidavit, the Board is unable to determine whether the disability Retiree continues to be disabled, the Board shall make further inquiry as necessary. E. Such inquiry may include job availability and medical ability to perform duty. If the Board determines that a Police Officer position appropriate for assignment maybe available, and the disability Retiree maybe able to perform duty in such position, an independent medical examination or examinations shall be performed at the Board's expense by a physician or physicians selected by the Board. A job description and physical or psychological requirements necessary to perform the position shall be provided to the independent medical examiner(s). F. After receipt of the report or reports of the independent medical examiner(s), other medical evidence and determination of job availability, the Board shall determine whether disability benefits shall continue. RULE 18 SURVEILLANCE 18.1 SURVEILLANCE Any Trustee who has reason to believe that a disability Retiree may be recovered from his disability and again able to perform useful and efficient service as a Police Officer and who further reasonably believes that surveillance of the Retiree, including the production of video tapes of the Retiree, will help to establish the fact of the recovery, may authorize the Board's General Counsel to arrange for such surveillance. Surveillance of disability applicants may also be authorized by any Trustee who reasonably believes that such surveillance will assist the Board in determining an 00119050. WPD; 1 -30- L � 3� applicant's ability to perform useful and efficient service as a Police Officer. The cost of any surveillance authorized by any Trustee shall not exceed $10,000.00. RULE 19 INSURANCE PREMIUM DEDUCTIONS 19.1 INSURANCE PREMIUM DEDUCTION AUTHORIZATION A. As permitted by Florida Statute 185.05(6), upon the retiree's written request, the Board of Trustees hereby authorizes the Custodian or Board designee to withhold from a retiree's monthly retirement payment those funds that are necessary to pay premiums for certain insurance policies. B. Any retiree requesting such deduction under this policy may be required, as a pre- requisite, to be receiving the payment of his monthly retirement benefits via direct deposit. C. In order to participate in premium payments under this policy, the retiree shall be required to complete and submit all such forms as may be required to effectuate this benefit by the administrative assistant, plan custodian, and insurance carriers. D. Requests to begin such deductions shall be effective as soon as reasonably possible. Once elected, benefits deductions shall continue until such time as the retiree deceases or submits a termination request form to the administrative assistant or Board designee. Request for termination of deductions under this policy must be on a form obtained from the Administrative Assistant or Board designee and shall be effective as soon as reasonably possible. E. A retiree requesting a deduction under this policy shall be required to have such deduction be made in an amount to cover the total premium for all eligible insurance benefits. Partial premium payments may not be made through the use of pension funds and individual premiums may not be paid by separate means. F. Any insurance premiums paid in accordance with this policy shall be paid on a regularly recurring schedule. G. Premium payments made under this policy may only be made in equal monthly installments for each benefit year or the remainder of any benefit year as the case may be. 00119050.WPD;1 -31- r6 �� 19.2 TAX-FREE PAYMENT OF INSURANCE PREMIUMS While participating in premium deductions under this policy, retired police officers, as defined in Rule 19.3 below, may designate that a portion of their premiums for eligible health insurance or other qualified health insurance premiums as specified by the Pension Protection Act of 2006 (PPA) be paid on a tax free basis up to $3,000.00 annually (or the then current IRS allowable limits). A. The pension plan custodian must make the premium payment payable directly to the provider of the qualified health insurance. B. Retirees cannot receive any such tax free amounts as reimbursements. C. This eligibility does not extend to joint annuitants, survivor annuitants, or beneficiaries. D. Tax free payments may not be made on a lump sum basis but rather must be paid in level monthly installments during the benefit year or remainder thereof. E. All qualified insurance premiums will accumulate as they are paid during the taxable year until the maximum tax free benefit is achieved. After that, monthly group insurance benefit premiums will continue to be deducted on an after tax basis. F. Participants shall be required to sign an agreement and certify that they are eligible retired police officers and that they are not having tax free deductions for qualified health insurance premiums taken from any other retirement benefit plan. G. Once a retiree requests to participate in the tax free provisions of this policy, such election shall remain in effect continuously until revoked in writing and in compliance with all requirements of this policy. H. A retiree may only use the tax free provisions of this policy to defray the actual costs of purchasing qualified insurance products. Tax free pension annuity deductions for qualified health insurance premiums may not be made in excess of the actual monthly insurance premiums due. 00119050.WPD;1 -32- ( i 3 � 19.3 RETIREES WHO ARE ELIGIBLE FOR THE TAX-FREE PAYMENT OF QUALIFIED INSURANCE PREMIUMS In order to be eligible for coverage under the pre-tax policy, the retiree must be a retired "public safety officer" as defined by 42U.S.C. 3796b(9)(A) and must meet all of the following conditions: A. Must have been a police officer at the time of separation from employment. B. Must have retired from City service as a Normal Retirement or Disability Retirement. Persons receiving terminated vested benefits are not eligible. C. Must be receiving a monthly retirement benefit from the Pension Fund. 00119050. WPD; l -33- C6 J.31 Kenneth Killqore From: Bonni Jensen <bonni@robertdklausner.com> Sent: Friday, May 01, 2020 3:03 PM To: Kenneth Killgore Cc: bsjteam; Cassandra Harvey Subject: Sebastian Police Officers' Retirement System - Ordinance amendment - IRS Required Minimum Distribution Attachments: IRS ORD revised (00152896xBC171).docx CAUTION: This email originated from outside your organization. Exercise caution when opening attachments or clicking links, especially from unknown senders. Ken, Attached is a proposed amendment to the Plan to add the new required IRS language that was passed into law by the federal SECURE Act. Please add this item to the agenda for the next Board meeting. Let me know if you have any questions. To expedite the handling of your email, please be sure to copy bsiteam,,�firobertdklausner.com on your emails. Bonni S. Jensen Klausner, Kaufman, Jensen & Levinson 7080 N.W. 41h Street Plantation, Florida 33317 Telephone: 954-916-1202 Facsimile: 954-916-1232 bonni c�robertdklausner.com website — www.klausnerkaufman.com CONFIDENTIALITY NOTICE: This communication is confidential, may be privileged and is meant only for the intended recipient. If you are not the intended recipient, please notify the sender ASAP and delete this message from your system. IRS CIRCULAR 230 NOTICE: To the extent that this message or any attachment concerns tax matters, it is not intended to be used and cannot be used by a taxpayer for the purpose of avoiding penalties that may be imposed by law. CITY OF SEBASTIAN, FLORIDA ORDINANCE NO. 2020- AN ORDINANCE OF THE CITY OF SEBASTIAN, FLORIDA, AMENDING CHAPTER 58, ARTICLE III, POLICE OFFICERS' RETIREMENT PLAN, OF THE CODE OF ORDINANCES AMENDING SECTION 58-51, BENEFIT AMOUNTS AND ELIGIBILITY; SECTION 58-52, PRE -RETIREMENT DEATH; SECTION 58-55, OPTIONAL FORMS OF BENEFITS; SECTION 58-61, MINIMUM DISTRIBUTION OF BENEFITS; SECTION 58-62, MISCELLANEOUS PROVISIONS; PROVIDING FOR SEVERABILITY; PROVIDING FOR CODIFICATION; PROVIDING FOR THE REPEAL OF ALL ORDINANCES IN CONFLICT HEREWITH, TO THE EXTENT OF SUCH CONFLICT; AND PROVIDING FOR AN EFFECTIVE DATE. NOW, THEREFORE BE IT ORDAINED BY THE CITY COMMISSION OF THE CITY OF SEBASTIAN, FLORIDA: SECTION 1. That Chapter 58, Article III, Police Officers' Retirement Plan, Section 58-51, Benefit amounts and eligibility, of the Code of Ordinances of the City of Sebastian, is hereby amended to read as follows: Sec. 58-51.- Benefit amounts and eligibility. (e) Required distribution date. The member's benefit under this section must begin to be distributed to the member no later than April 1 of the calendar year following the later of the calendar year in which the member attains age 70- /2 72. Urovided the member had not attained aae 701,'2 by December 31. 2019; or the calendar year in which the member terminates employment with the city. SECTION 2. That Chapter 58, Article III, Police Officers' Retirement Plan, Section 58-52, Pre -retirement death, of the Code of Ordinances of the City of Sebastian, is hereby amended to read as follows: Sec. 58-52. - Pre -retirement death. (b) Deceased members vested or eligible for retirement with spouse as beneficiary. This subsection (b) applies only when the member's spouse is the sole designated beneficiary. The spouse beneficiary Page 1 of 5 00151080.DOC;2 H/ - d" of any member who dies and who, at the date of his death, was vested or eligible for early or normal retirement shall be entitled to a benefit as follows: (5) Notwithstanding anything contained in this section to the contrary, in any event, distributions to the spouse beneficiary will begin by December 31 of the calendar year immediately following the calendar year in which the member died, or by a date selected pursuant to the above provisions in this section that must be on or before December 31 of the calendar year in which the member would have attained 7" aae 72. SECTION 3. That Chapter 55, Article III, Police Officers' Retirement Plan, Section 58-55, Optional forms of benefits, of the Code of Ordinances of the City of Sebastian, is hereby amended to read as follows: Sec. 58-55. - Optional forms of benefits. (e) Retirement income payments shall be made under the option elected in accordance with this section and shall be subject to the following limitations: (5) The member's benefit under this section must begin to be distributed to the member no later than April 1 of the calendar year following the later of the calendar year in which the member attains age 7-01A 72. r)rovided the member had not attained aae 701,z by December 31, 2019, or the calendar year in which the member terminates employment with the city. Page 2 of 5 00151 oao.Doc;2 H/-3 SECTION 4. That Chapter 58, Article III, Police Officers' Retirement Plan, Section 58-61, Minimum distribution of benefits, of the Code of Ordinances of the City of Sebastian, is hereby amended to read as follows: Sec. 58-61. - Minimum distribution of benefits. (b) Time and manner of distribution. (1) Required beginning date. The member's entire interest will be distributed, or begin to be distributed, to the member no later than the member's required beginning date which shall not be later than April 1 of the calendar year following the later of the calendar year in which the member attains age 7414 72. Drovided the member had not attained aae 701,,z by December 31. 2019_ or the calendar year in which the member terminates employment with the city. (2) Death of member before distributions begin. If the member dies before distributions begin, the member's entire interest will be distributed, or begin to be distributed no later than as follows: a. If the member's surviving spouse is the member's sole designated beneficiary, then distributions to the surviving spouse will begin by December 31 of the calendar year immediately following the calendar year in which the member died, or by a date on or before December 31 of the calendar year in which the member would have attained age 7" 72. Drovided the member had not turned 701/- by December 31. 2019, if later, as the surviving spouse elects. SECTION 5. That Chapter 58, Article III, Police Officers' Retirement Plan, Section 58-62, Miscellaneous provisions, of the Code of Ordinances of the City of Sebastian, is hereby amended to read as follows: Sec. 58-62. - Miscellaneous provisions. Page 3 of 5 00151080.DOC;2 (c) Qualification of system. It is intended that the system will constitute a qualified public pension plan under the applicable provisions of the code for a qualified plan under code section 401(a) and a governmental plan under code section 414(d), as now in effect or hereafter amended. Any modification or amendment of the system may be made retroactively, if necessary or appropriate, to qualify or maintain the system as a plan meeting the requirements of the applicable provisions of the code as now in effect or hereafter amended, or any other applicable provisions of the U.S. Federal Tax Laws, as now in effect or hereafter amended or adopted, and the regulations issued thereunder. (1) In recognition of the chanaina requirements of system qualification. the Board shall adopt an administrative oolicy settina forth the required ,provisions for tax aualifi;a io. Such a policy shall be amended by the Board as required to mainta,in_ _r,gntinuina comDliance with the Internal Revenue Code and that Dolicv and anv amendments shall have the force of law as if adopted by the Citv Commission. SECTION 6: Codification. This Ordinance shall be codified in the Code of Ordinances of the City of Sebastian. SECTION 7: Severability. If any portion, part or section of this ordinance is declared invalid, the valid remainder hereof shall remain in full force and effect. SECTION 8: Repeal of Ordinances in Conflict. All ordinances or parts of ordinances in conflict herewith are hereby repealed to the extent of such conflict. SECTION 9: Effective Date. This ordinance shall become effective immediately upon final passage as provided by law. ED DODD, MAYOR FIRST READING PUBLISHED SECOND READING Page 4 of 5 00151080.DOC;2 PUBLIC HEARING I, _ , City Clerk of the City of Sebastian, Florida, do hereby certify that the foregoing Ordinance was duly adopted in accordance with the provisions of applicable law this day of , 2020. CITY CLERK Page 5 of 5 00151080.DOC;2 KAUrMA,N JENSEN LEVI:NSON tN IJ o -ZT=1W]1Z1j11Ti TO: ALL FLORIDA CLIENTS FROM: KLAUSNER, KAUFMAN, JENSEN & LEVINSON RE: COVID 19 MESSAGE - EXTENSION OF VIRTUAL MEETINGS UPDATE #4 DATE: APRIL 30, 2020 To continue to keep everyone safe, our office will remain in remote operation at least through the end of May, and perhaps later as public safety needs dictate. Remember you can contact any of us through the office phone line 954-916-1202 or via email. With regard to meetings, Governor DeSantis has extended the suspension of the requirement that a quorum be present in the public meeting place with Executive Order 20- 112. This allows Pension Boards of Trustees to meet via video or telephone conference. Our lawyers have been meeting with Boards using these methods and they have been very well received. Our office has the capability to host both video and telephone conferences with you through a wide variety of programs. If you have questions, please call to discuss. We continue to experience some delay in getting IMEs set for the disability applications and so we continue to think that it will take longer than normal to process disability applications, at least until the end of May. Executive Order 20-112 opened up medical facilities to elective procedures so some doctors will be treating a back log of their patients. We expect that this could also create delays. We continue to be committed to serve your needs during this crisis and to do our best to protect the retirement benefits of our nation's public servants. To all of you and your families, we wish good health and safety W:\Wd0C5\LLP\SONNI\CLTMEMO\00153756. WPO 7080 NOWrHwr:s•r 4TTI STREXT. PLAN-iwrioN, FLORIDA 33 317 PHONE: (954) 9 J 6-1202 - f'.AX: (954) 9 f 6-1 ? 12 \vwwM ausnerk.aufrt an.com /� K LtUSNER KAUFMAN f ENSE,N Lf:VINSCIN MEMORANDUM TO: ALL FLORIDA CLIENTS FROM: KLAUSNER, KAUFMAN, JENSEN & LEVINSON RE: DOVID 19 MESSAGE - EXTENSION OF VIRTUAL MEETINGS UPDATE #5 DATE: MAY 19, 2020 To continue to keep everyone safe, our office will remain in remote operation at least through the end of June, and perhaps later- as public safety needs dictate. ]Remember you can contact any of us through the office phone line 954-916-1202 or via email. With regard to meetings, Governor DeSantis has extended the declaration of emergency in Florida through July 7, 2020 with Executive Order 20-114. This allows Pension Boards of Trustees to continue to meet via video or telephone conference. Remember our office has the capability to host both video and telephone conferences with you through a wide variety of programs. If you have questions, please call to discuss. Even when Florida is fully re -opened from the COVID closings, we urge our Boards to consider continuing to invite service providers to attend meetings via electronic means. As you know, many of the service providers travel to your meetings from outside of the area. Meeting quorur`ns can be established by three trustees in a room where social distancing can be easily accomplished and limits the number of people who need to come into close contact for long periods of time. If you have questions about how best to implement social distancing for your board, please call to discuss. We continue to be committed to serve your needs during this crisis and to do our best to protect the retirement benefits of our nation's public servants. To all of you and your families, we wish good health and safety. W:\Wdocs%LL PIBONNIICLTMEMO%001 59250. WPD 00159250.WPD;1 7080 NORTHWEST 4'rn STREET. PLA.NTATInN, FLORIDA 3-3317 PHONE: (954) 916-1202 • FAH.: (954) 916-1232 w ww.klausnerkaufnian.00111 ' I_ A.USN JENSEIN L_ E V I N S C MEMORANDUM To: Board of Trustees From: Klausner, Kaufman, Jensen and Levinson Subject: Continued Guidance on the Families First Coronavirus Response Act (FFCRA) and the CARES Act Date: April 27, 2020 FAMILIES FIRST CORONAVIRUS RESPONSE ACT (FFCRA): GROUP HEALTH PLANS AND HEALTH INSURANCE COVERAGE 3201 (CARES) • Section 3201 of the CARES Act amended section 6001 of the FFCRA to include a broader range of diagnostic items and services that plans and issuers must cover without any cost -sharing requirements or prior authorization or other medical management requirements. §6001 (FFCRA) • Section 6001 of the FFCRA applies to group health plans' and health insurance issuers offering group or individual health insurance coverage (including grandfathered health 'The term "group health plan" includes both insured and self -insured group health plans. It includes private employment -based group health plans (ERISA plans), non-federal 7080 NOr:rHWEs,r4l" STREET, PLANTATION, FLORmA 33317 HONE: (954) 916-1202 ...- FAX: (954) 916-9 232 w w.kiausiierk-aLifillail.COM N3-1 April 27, 2020 Page 2 plans as defined in section 1251(e) of the Patient Protection and 2 5 U.S.C. § 553(b)(B) and (d)(3). Does NOT apply to group health plans that do not cover at least two employees who are current employees (such as plans in which only retirees participate). Requires group health plans and health insurance issuers offering group or individual health insurance coverage to provide benefits for certain items and services related to diagnostic testing for the detection of SARS-CoV-2 or the diagnosis of COVID-19 (referred to collectively in this document as COVID-19), as determined by the individual's attending healthcare provider in accordance with accepted standards of current medical practice, when those items or services are furnished on or after March 18, 2020, and during the applicable emergency period2. Plans and issuers must provide this coverage without imposing any cost -sharing requirements (including deductibles, copayments, and coinsurance) or prior authorization or other medical management requirements. REQUIRED COVERAGE: - Coverage must be provided for the following items and services: (1) An in vitro diagnostic test as defined in section 809.3 of title 21, Code of Federal Regulations, for the detection of SARS-CoV-2 or the diagnosis of COVID-19, and the administration of such a test, that — A. Is approved, cleared, or authorized under section 510(k), 513, 515, or 564 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. §§ 360(k), 360c, 360e, 360bbb3); governmental plans (such as plans sponsored by states and local governments), and church plans. 2 Generally, under section 319 of the Public Health Service (PHS) Act, a public health emergency declaration lasts until the Secretary of HHS declares that the public health emergency no longer exists, or upon the expiration of the 90-day period beginning on the date the Secretary declared a public health emergency exists, whichever occurs first. The Secretary may extend the public health emergency declaration for subsequent 90-day periods for as long as the public health emergency continues to exist, and may terminate the declaration whenever he determines that the public health emergency has ceased to exist. Unless extended or terminated earlier, the public health emergency related to COVID-19 is effective through April 25, 2020. H 3 -)_ April 27, 2020 Page 3 B. The developer has requested, or intends to request, emergency use authorization under section 564 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 360bbb-3), unless and until the emergency use authorization request has been denied or the developer of such test does not submit a request within a reasonable timeframe; C. Is developed in and authorized by a State that has notified the Secretary of HHS of its intention to review tests intended to diagnose COVID-19; or D. Other tests that the Secretary of HHS determines appropriate in guidance. (2) Items and services furnished to an individual during healthcare provider office visits (which includes in -person visits and telehealth visits), urgent care center visits, and emergency room visits that result in an order for or administration of an in vitro diagnostic product described in paragraph (1), but only to the extent the items and services relate to the furnishing or administration of the product or to the evaluation of the individual for purposes of determining the need of the individual for such product. Plans and issuers are required to provide coverage for items and services that are furnished by providers that have not agreed to accept a negotiated rate as payment in full (i.e., out -of -network providers). 1. If the plan or issuer has a negotiated rate with such provider in effect before the public health emergency declared under section 319 of the PHS Act, such negotiated rate shall apply throughout the period of such declaration. 2. If the plan or issuer does not have a negotiated rate with such provider, the plan or issuer shall reimburse the provider in an amount that equals the cash price for such service as listed by the provider on a public internet website, or the plan or issuer may negotiate a rate with the provider for less than such cash price. • The term "visit" includes both traditional and non-traditional care settings in which a COVID-19 diagnostic test is ordered or administered, including COVID-19 drive -through screening and testing sites where licensed healthcare providers are administering COVID-19 diagnostic testing. f/.3- _? April 27, 2020 Page 4 PLAN AMENDMENTS: Plans and issuers are permitted to amend the terms of a plan or coverage to add benefits, or reduce or eliminate cost sharing, for the diagnosis and treatment of COVID- 19 prior to satisfying any applicable notice of modification requirements and without regard to otherwise applicable restrictions on mid -year changes to health insurance coverage. • If a plan or issuer makes a material modification (as defined under section 102 of ERISA) in any of the terms of the plan or coverage, to include telehealth coverage, that would affect the content of the SBC that is not reflected in the most recently provided SBC, and that occurs other than in connection with a renewal or reissuance of coverage, the plan or issuer must provide notice of the modification to enrollees not later than 60 days prior to the date on which the modification will become effective, or as soon as reasonably practicable. They may either provide an updated SBC reflecting the modification or provide a separate notice describing the material modifications. • If a plan or issuer maintains any such plans and issuers must comply with all plan documents or terms of coverage. changes beyond the emergency period, other applicable requirements to update **States may impose additional standards or requirements on health insurance issuers with respect to the diagnosis or treatment of COVID-19, to the extent that such standards or requirements do not prevent the application of a federal requirement. EXCEPTED BENEFITS and EAP's: Background - Sections 2722 and 2763 of the PHS Act, section 732 of ERISA, and section 9831 of the Code provide that the respective requirements of title XXVII of the PHS Act, part 7 of ERISA, and Chapter 100 of the Code generally do not apply to the provision of certain types of benefits, known as "excepted benefits." Under section 2791(c)(1) of the PHS Act, section 733(c)(1) of ERISA, and section 9832(c)(1) of the Code, benefits that are generally not health coverage, including on -site medical clinics, are excepted benefits. Limited excepted benefits, which may include limited scope vision or dental benefits, and benefits for long-term care, nursing home care, home healthcare, or community -based care are excepted only if certain conditions are met. Section 2791(c)(2)(C) of the PHS Act, section 733(c)(2)(C) of ERISA, and section 9832(c)(2)(C) of the Code authorize the Secretaries of HHS, Labor, and the Treasury (collectively, the Secretaries) to issue regulations establishing other, similar limited benefits as excepted benefits. The Secretaries H3- y April 27, 2020 Page 5 exercised this authority previously with respect to certain employee assistance programs (EAPs). • EAP's are excepted if they satisfy all of the following requirements: (A) The EAP does not provide significant benefits in the nature of medical care. For this purpose, the amount, scope and duration of covered services are taken into account. (B) The benefits under the EAP are not coordinated with benefits under another group health plan: (1) Participants in the other group health plan must not be required to use and exhaust benefits under the EAP (making the EAP a gatekeeper) before an individual is eligible for benefits under the other group health plan; and (2) Participant eligibility for benefits under the EAP must not be dependent on participation in another group health plan. (C) No employee premiums or contributions are required as a condition of participation in the EAP. (D) There is no cost sharing under the EAP. • The Departments' final regulations provide that for the purpose of determining whether an EAP provides benefits that are significant in the nature of medical care, the amount, scope, and duration of covered services are taken into account. • An EAP will not be considered to provide benefits that are significant in the nature of medical care solely because it offers benefits for diagnosis and testing for COVID-19 while a public health emergency declaration under section 319 of the PHS Act related to COVID-19 or a national emergency declaration under the National Emergencies Act,26 related to COVID-19 is in effect. • Benefits offered by an employer under an EAP for diagnosis and testing for COVID-19 at an on -site medical clinic will constitute an excepted benefit in all circumstances. April 27, 2020 Page 6 **Note that guidance concerning the application of the FFCRA and the CARES Act continues to be updated frequently. This memo represents our considered view as of the date issued to the proper application after reviewing the Act and available resources. **FAQ's prepared jointly by the Department of Labor (DOL), Health and Human Services (HHS), and the Treasury are available at: https://www.dol,gov/agencies/ebsa/laws-and- regulations/laws/affordable-care-act/for-employers-and-advisers/aca-implementation- faqs and www.cms.gov/cciio/resources/fact-sheets-and-faqs/index.htmi. If you have any questions, email Bonni Jensen (bonni,"(i�.robertdkiausner.com) or Bob Klausner (bobarobertdkiausner.com). This memo will be posted on our website, https://klausnerkaufman.com and will be updated as additional guidance becomes known. 143-� Annual Oueratine Expenses Investment Managers: Highland Capital Boston Parners Fiera Capital (APEX) Renaissance Center Coast (Brookfield) Intercontinental Performance Manager - Graystone Salem Trust Company ADR Agent Fee - Foreign Dividends Sub -total Investment Expense Actuarial - Foster & Foster Experience Study Update - Foster & Foster State Report Preparation - Foster $ Foster Legal Services Administrative Fee to City Insurance Miscellaneous: Minutes Preparation Codification of Approved Ordinance(s) Functional Capacity Assessments Travel Contingency Sub -total Administrative Expense Total Operating Expenses CITY OF SEBASTIAN, FLORIDA POLICE PENSION FUND - 2019/2020 BUDGET VERSUS ACTUAL CASH BASIS AS OF JUNE 5, 2020 Amended 2019/2020 2019/2020 Actual 2019/2020 Payments To Date Budget Budeet 10/1-12131 1 1-3 31 4 1-6 30 7 1-9 30 $ 47,000 $ 47,000 $ 12,640.30 $ 13,501.56 7,000 7,000 1,930.29 2,194.30 1,807.40 6,000 6,000 1,497.53 1,627.93 1,258.73 7,000 7,000 1,723.97 1,862.06 1,332.50 3,400 3,400 803.34 784.20 346.77 13,500 13,500 3,375.00 3,375.00 3,375.00 27,000 27,000 4,715.00 6,960.00 5,515.00 1,500 1,500 $ 112,400 $ 112,400 $ 26,685.43 $ 30,305.05 $ 13,635.40 $ 17,000 17,000 17,464.00 7,500 - 7,500.00 3,000 3,000 3,000.00 40,000 40,000 2,561.25 12,873.75 2,390.00 24,000 24,000 6,000.00 12,000.00 2,600 2,600 2,585.00 1,050 1,050 216.00 162.00 600 600 2,700 2,700 7,500 15,000 $ 105,950 $ 205,950 $ 12,362.25 $ 13,035.75 $ 42,354.00 $ $ 218,350 $ 218,350 $ 38,047.68 $ 43,340.80 $ 55,989.40 $ Previous Year's Annual Total 2019/2020 2018/2019 2017/2018 2016/2017 2015/2016 2014/2015 Actual Actual Actual Actual Actual Actual $ 26,141.86 $ 34,621.51 $ 67,754.39 $ 60,479.85 $ 42,352.99 $ 64,402.32 5,931.99 6,885.81 6,763.47 - - 4,384.19 5,943.76 5,386.84 4,918.53 6,874.16 6,451.11 1,934.31 3,113.51 2,909.69 10,125.00 13,500.00 13,500.00 13, 500.00 13,500.00 16,875.00 17,190.00 26,480.00 28,250.00 7,245.00 6,265.00 6,615.00 - 1,140.85 1,643.74 581.24 451.80 141.44 $ 70,625.88 $ 98,559.60 $132,659.24 $ 81,806.09 $ 62,569.79 $ 88,033.76 17,464.00 16,756.00 17,834.00 13,331.00 14,765.00 21,398.00 7,500.00 - - - - - 3,000.00 3,000.00 - - - 17,825.00 39,362.45 25,138.80 29,011.01 18,294.60 17,189.16 18,000.00 24,000.00 24,000.00 2,585.00 2,585.00 2,585.00 3,021.05 3,121.05 3,121.05 378.00 694.00 1,042.00 - 598.20 1,222.07 2,700.00 1,344.00 - - 695.50 101.90 $ 66,752.00 $ 89,097.45 $ 72,542.00 45,363.06 $ 36,876.15 $ 43,032.18 $ 137,377.88 $ 197,657.05 $205,201.24 127,169.15 $ 99,445.94 $ 131,065.94 CITY OF SEBASTIAN POLICE OFFICERS' PENSION PLAN CALENDAR OF BOARD ACTIVITIES — Updated September 2019 JANUARY: No Board activity. FEBRUARY: No Board activity. MARCH: 15t Quarter Board Meeting: • Update and Review Calendar of Activities. • Request update of Summary Plan Description (every two years). • Investment Report and Performance Review. • Receive Annual Report to Division of Retirement. APRIL: No Board activity. MAY: No Board activity. JUNE: 2°d Quarter Board Meeting: • Review Calendar of Board Activities. • Investment Report and Performance Review. • Select Board Chairperson and Secretary (every two years). • Approve and Distribute to Members the Summary Plan Description (if needed). JULY: Board Members should file Financial Disclosure forms by Julylst. AUGUST: Receive State premium tax monies. SEPTEMBER: • 3rd Quarter Board Meeting: • Agree on Quarterly Meeting dates for following year. • Review Calendar of Board Activities • Approve Election Process for Police Officer Members (if needed). • Select Board appointed Member and request City Council confirmation (if needed). • Investment Report and Performance Review. • Report on year-to-date expenses and approve budget for the next year. OCTOBER: No Board activity. NOVEMBER: No Board activity. DECEMBER: • 4th Quarter Board Meeting: • Review Calendar of Board Activities. • Consider changes to Operating Rules (if needed). • Report on Actual Operating Expenses for the year. • Investment Report and Performance Review. • Update Investment Policy and Allocation Strategy. • Accept the Actuarial Report. • Approve Expected Rate of Return. • Confirm renewal of Liability Insurance Policy. Page 1 of 1 — �—