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
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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
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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�
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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
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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.
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