Loading...
HomeMy WebLinkAbout06182013 PRB Minutes1 DRAFT Sebastian Police Pension Board Minutes June 18, 2013, 10:00 a.m. Sebastian City Council Chambers TYPE OF MEETING: Regularly Scheduled ATTENDEES: Board Members: Greg Witt, Chair Robert Zomok, Secretary Harry Tanner Debra Krueger Steve Marcinik EXCUSED : CONSULTANTS: Scott Owens, Graystone Consulting Lee Dehner, Attorney Grant McMurray, ICC Management Doug Lozen, Foster & Foster SUBJECT CALL TO ORDER 10:00 a.m. There being a quorum present, Greg Witt, called the meeting to order. SUBJECT APPROVAL OF MINUTES 10:05 a.m. Steve Marcinik motioned the minutes of the March 19, 2013 Board Meeting be approved. Motioned seconded by Bob Zomok and passed unanimously without change. 2 SUBJECT OLD BUSINESS Updated Summary Plan Description Lee Dehner reported the SPD is ready to go only awaiting changes that will/may result from the Bargaining Agreement negotiations. Proposed Ordinance Collective Bargaining is slated to begin in late June or early July. Attorney Dehner will be informed of the status of items changing to include the three (3) “no-cost” improvements. (These include: amendments to allow the Police Officer to purchase service for FMLA time, to purchase prior Police service, and to purchase prior military service credits toward retirement calculation). Additional liberal investment language is to be included along with IRS changes. Asset Allocation Strategy Building upon the education session Scott Owens delivered to the Board last meeting, the Board reviewed Scott’s presentation of Strategic 7- year Risk/Return Assumptions and Secular 20-year Risk/Return Assumptions. Asset Allocation rests on three (3) key items - expected return, expected risk, and the coordination of these two factors. The Board had an extended and in-depth discussion of the material presented. One key issue emerged - the potential exists to add language to the proposed Ordinance providing the Board with additional flexibility in determining Asset Allocation within the guidelines of State statutes and our own Investment Policy Statement. Further discussion was tabled pending the outcome of the upcoming collective bargaining and revising the proposed Ordinance in line with those outcomes. (These are some of the items Attorney Dehner will consider and draft language for as referred to above) Investment Policy Statement Review. Scott Owens presented a draft of a proposed IPS. This item was tabled pending the outcome of collective bargaining and revision of the proposed Ordinance. 3 SUBJECT NEW BUSINESS 20-30 Year Funding Requirements. The Board reviewed the study of the impact of the reduction in the benefit multiplier from 3% to 2% for Members hired after April 10, 2012 and the increase in Member Contribution Rate from 5% to 8% for Members hired prior to October 1, 2011 received from our Actuaries (Foster & Foster) as well as an analysis prepared and presented by Doug Lozen. These analyses, independently prepared, clearly demonstrate the reduction in cost to the City of Sebastian in the short and over the long term. The cost to the City is lower now and will continue to decrease, even if no other changes are made to areas like the Pension Plan Assumptions. In Study 1 presented by Doug, the cost to the City in 2014, (using the current Pension Plan Assumptions and applying the previous 3% multiplier and the 5% Member Contribution) will be 21.3% of Police payroll. By the year 2034, the cost will reduce to 12.5%. By using the current Benefit provisions, the cost to the City in 2014 will be 18.1% of Police payroll. In 2034, the cost to the City reduces to 7.2%. Experience Study/Assumption Rates. In order to more fully explore methods of reducing the cost to the City, Debra Krueger made a motion to have Graystone complete and “experience study” showing a series of “what-ifs” should the Board opt to change the Pension Plan Assumptions. The cost is not to exceed $5,000.00. Steve Marcinik seconded the motion and it passed unanimously. CBA Language based upon SB 1128. Attorney Dehner distributed several iterations of language that may be included in the Collective Bargaining Agreement based on Florida Senate Bill 1128. Release of Protected Information, Update to Chapter 119 Due to the changes enacted in this piece of legislation, Steve Marcinik made a motion to include the Extent of Confidentiality revisions in the operating Rules of the Board. Harry Tanner seconded the motion. The motion passed unanimously. The appropriate form is to be completed and sent to the State. 4 Review of Investment Portfolio Scott Owens presented a Summary of Relevant Facts about the performance of the Fund with emphasis on the last Quarter. The US markets are performing, for the most part, in positive double digit gains. Those sectors that are usually “defensive” have outperformed the sectors normally seen as “aggressive.” Report on the Sale of (5) Downgraded Bonds. Grant McMurry reported that two of the bonds (Simon Properties and Comcast) have been sold. Both items were sold at a profit. Fund Review Grant also reported that the Fund gained $578,419.00 during the last quarter. The aggregate account increased 10.79 as of 06/17/13, versus 7.07 Index. Legal/Legislative Update. In addition to the items reported by Attorney Dehner above, he noted that Senate Bill 534 has been enacted. This new legislation has additional filing and disclosure requirements. This will mean increased costs to all police/fire pension plans in Florida. The law is being challenged. Disclosure Statement Reminder due July 1, 2013. Attorney Dehner reminder Board Members to file the Form 1 disclosure statements required under Florida law. Failure to comply could have a financial/legal impact on Board Members. SUBJECT ADJOURNMENT 12:10 p.m. Having no further business for discussion, Chairman Greg Witt asked for a motion to adjourned the meeting. Debra Krueger made the motion, seconded by Harry Tanner. The motion passed unanimously. Next regularly scheduled meeting is September 17, 2013, at 10:00 AM in the City Council Chamber.