Village of North Palm Beach Police and Fire Pension Fund

Transcription

1 Village of North Palm Beach Police and Fire Pension Fund MINUTES OF MEETING HELD September 2, 2008 Chairman, Robert DiGloria called the meeting to order at 2:07 PM in the Conference Room of the North Palm Beach Village Hall located at 501 US Highway One, North Palm Beach, FL. Those persons present were: TRUSTEES PRESENT TRUSTEES ABSENT OTHERS PRESENT Robert DiGloria Scott Freseman Steve Brandt Henry Maki Joseph Yungk Bonni Jensen, Hanson, Perry & Jensen; Fund Counsel Denise McNeill; Pension Resource Center John McCann; Thistle Asset Consulting Steve Stack & Carli Hutton; ICC Capital Howard Rew & Rowana Flita; Cherry Bekaert & Holland Darryl Aubrey; Village Council Members of the Plan ITEMS FROM THE PUBLIC None. ICC CAPITAL Steve Stack introduced Carli Hutton of ICC Capital Management. He explained that Ms. Hutton is typically involved with creating and preparing the Plan s quarterly reports. Mr. Stack presented the Board with the Investment Review Quarterly Report for the quarter ending June 30, He noted that five of the last six months have resulted in positive returns for the Plan, mostly due to diversification. Mr. Stack reported that the recent decline in the market has had an affect on nearly all sectors except for energy which was up for the quarter. Mr. Stack reported a loss of -1.54% return for the quarter ending 06/30/08. The Plan held $3,595,739 in fixed, $4,742,830 in equity, $1,100,498 in cash and $617,466 in ADR s. Mr. Stack reviewed the transactions in the portfolio noting that the portfolio is well positioned, considering the volatility in the market. THISTLE ASSET CONSULTING John McCann presented the Trustees with a Morningstar report of the ADR portion of the portfolio. Mr. McCann went on to review the executive summary for the quarter ending June 30, He reported that energy was the best performing sector, up 16.92% and financial was the worst performing sector, down 19.01%. Mr. McCann reviewed the compliance report noting that although the manager is taking more risk, the Plan continues to receive the appropriate return, relative to that higher risk. Mr. McCann noted the plan was down -1.51% beating the policy of -2.05% for the quarter, ranking the Plan in the top 37% of the public

2 2 fund universe for the quarter. He further reported that the Plan was down -3.25% for the one year view beating the policy of -5.06% and ranking the Plan in the top 1% in the public fund universe for the one year view. After the recent quarter, the Plan ranks in the top 9% of the public fund universe for the last three years. Mr. McCann noted that ICC is doing well relative to their peers and the index. AUDIT PRESENTATION Howard Rew of Cherry, Bekaert & Holland presented the 2007 audited Financial Statement for the year ending September 30, 2007, describing the structure of the report. He reported the Plan s total assets of $10,987,694 as of September 30, It was noted that an error was made related to the Village s contribution. Page 15 of the report will be revised to reflect the Village s correct contribution of 100%. Mr. Rew reviewed the amount of funds distributed from the Plan and advised that the lump sum distributions will continue to affect the overall administration of the Plan. Mr. Rew reported an asset increase of $1,537,226 mostly due to investment performance and contributions to the Plan. Scott Freseman made a motion to accept the audited financial report as presented with the amendment to correct page 15 reflecting 100% employer contribution. The motion received a second from Henry Maki and was approved by the Trustees 4-0. Steve Brandt made a motion to accept the investment monitor and manager reports as presented by ICC Capital and Thistle Asset Consulting. The motion received a second from Scott Freseman and was approved by the Trustees 4-0. OLD BUSINESS Henry Maki inquired into the fiduciary liability insurance coverage. The administrator had acquired two quotes for coverage for the Board. Discussion followed regarding such policies and Mrs. Jensen explained that the policy would be on a claims-made basis therefore, if the policy is in affect when a claim is made, coverage would be available. Discussion followed regarding the prior coverage through the village and how that policy had been terminated. The Pension Fund had previously been covered under the Village s umbrella policy, however when the Village changed insurance carriers, the police was not renewed for the Pension Fund and the Board had not been notified. Steve Brandt made a motion to accept the least expensive quote for fiduciary liability insurance (as long as both have been determined reasonably equivalent by the attorney) and if the Village has not and will not reinstate the fiduciary liability coverage to the Plan. The motion received a second from Henry Maki and was approved by the Trustees 4-0. The administrator will follow up with Mrs. McGann regarding the matter. IRS DETERMINATION LETTER Bonni Jensen reported that IRS representatives presented at a legal conference held in Boston. The IRS addressed their efforts toward education, outreach and compliance for the Governmental Plans Community. They have requested all governmental plans file for IRS determination letters. In 2009 the IRS will be sending a survey requesting all plans respond. Lengthy discussion followed regarding the matter and the options available to the Plan. Mrs. Jensen explained there would be a $1,000 IRS fee to file along with the attorney s cost to process. She expects the costs to run $4,000 (on the lowest end) and up. Mrs. Jensen feels that the Plan most likely meets the IRS qualifications. Discussion followed regarding the matter. The Trustees determined that they will await the IRS survey.

3 3 FEDERAL LAW UPDATES (HEART) Mrs. Jensen then reported of Federal and State Legal Updates related to the Heroes Earnings Assistance and Relief Tax Act of 2008 (HEART). The survivor benefit requires the tax-qualified plan provide to the survivors of a participant who dies while on active military duty the same benefits that the participant would have received under the plan had he/she resumed participation under the plan and then terminated on account of death. It is still unclear if the law requires the Plan treat as a duty or non-duty related disability or death. Mrs. Jensen advised that the Village determines a member s ability to return to work as it relates to disability. These new provisions were made effective January 1, 2007 and the Plan must be amended by January 1, STATE OF FLORIDA 60T RULES Mrs. Jensen addressed the State of Florida s 60T Rules under Statute 112 relating to actuarial services. The State recently held a rules workshop related to the matter where approximately fifty pension attorneys, actuaries and Trustees attended. There is no definition of material in the Florida Statute and the State has recently determined the definition as 1% cost basis or anything the State requests is to be considered material. If the State requests such material information, the information is to be provided within thirty days or most of the State funds will be held from the Plan. Additionally, if the Plan is not in compliance, the Municipality can lose all of their State funding. The rules also impose actuarial mortality tables which are having a significant cost impact on various plans and municipalities around the State. Mrs. Jensen explained that another City in attendance at this workshop advised they had a preliminary cost calculated for their pension plan and their actuary determined the cost of the changes would be over $2M additional cost for that City. Other municipalities argued the changes would be a significant increase to their existing cost as well. It appears the rules look to dilute the Trustee responsibilities allowing Plan sponsors (municipalities) to control the Plans. A task force is being created to address the 60T Rules, requesting the State reconsider, especially considering the significant impact municipalities are being affected by in their 2008/2009 budget. Currently, the next meeting is scheduled for September 10 th, 1 P.M. to 4 P.M. in the same hotel at the end of the FPPTA conference. Mrs. Jensen will continue to monitor the situation and will report to the Board accordingly. MINUTES Henry Maki made a motion to approve the minutes of May 16 and May 20, The motion received a second from Steve Brandt and was approved by the Trustees 4-0. NEW BUSINESS Mr. Freseman inquired into recent communication with the actuary. The Trustees felt that GRS had committed to a couple of specific deadlines that were not kept. Discussion followed regarding what would be considered a reasonable time frame. The Trustees then discussed attempting to coordinate requests to help streamline communication from each Union. The Board instructed the administrator to process an RFP for actuarial services. ATTORNEY REPORT Mrs. Jensen inquired if any feedback had been received on the draft of the Summary Plan Description. The draft had been posted on the department s bulletin board with a

4 4 request asking the members if they had any additional suggestions. The Trustees advised that no suggestions had been received from membership. Steve Brandt made a motion to approve the Summary Plan Description for distribution. The motion received a second from Scott Freseman and was approved by the Trustees 4-0. The attorney will have copies prepared for distribution. ADMINISTRATIVE REPORT Denise McNeill reported that the updated impact statement had been received from GRS and provided to the Board electronically. The Trustees confirmed the information had been received. First Southern Bank agreement Denise McNeill reported that the issue regarding First Southern Bank s government cash checking account arrangement had been addressed by the attorney and the form was ready to be signed. The account change would offer protection for the full balance in the account beyond the normal FDIC $100,000 limit, as well as offer a higher interest rate than the Plan was currently earning. Henry Maki made a motion to approve the First Southern GovCash agreement. The motion received a second from Steve Brandt and was approved by the Trustees 4-0. Audit Representation Letter Mrs. McNeill reported that the audit representation letter had been received from the auditor and provided to the attorney for review. Discussion followed regarding the audit representation letters. In general, it appears the letters and agreements are being changed throughout the industry to further reduce the auditors liability to the Pension Plan. The Board signed the agreement. COLA Review Mrs. McNeill presented the COLA information to the Trustees reflecting a 1.7% increase in the CPI-W between April 2007 and April 2008 which would result in a 1.7% increase effective October 1, 2008 for members receiving a monthly benefit. Henry Maki made a motion to accept the COLA of 1.7% and increase the monthly benefits accordingly effective October 1, The motion received a second from Steve Brandt and was approved by the Trustees 4-0. Pending Ordinance Changes Mrs. Jensen will send a reminder to the Village regarding the pending Ordinance changes that relate to the minimum state mandated benefits and the lump sum distributions from the Plan. Election Update Mrs. McNeill reported that she had made an error on the date for Mr. Yungk s recent election. The position had been posted as being a term through August 11, 2010, however the position was actually to fill the vacated seat of Robert Furey which terms on March 30, She explained that she has communicated this error with Mr. Yungk. Henry Maki made a motion to accept the adjusted notice of the recent election. The motion received a second from Steve Brandt and was approved by the Trustees 4-0. The Administrator will post a revised notice for Mr. Yungk s seat reflecting the correction. Mrs. McNeill will keep the Board apprised of the pending nominations due on September 8, 2008 for the seats currently held by Henry Maki and Scott Freseman.

5 5 INCOME AND EXPENSE, DISBURSEMENT REVIEW Denise McNeill presented disbursements for approval. Steve Brandt made a motion to approve all disbursements as presented. The motion received a second from Henry Maki and was approved by the Trustees 4-0. Mrs. McNeill then reviewed the un-audited Financial Statements of the Plan through June 30, There being no further business: Steve Brandt made a motion to adjourn the meeting at 4:15 P.M. The motion received a second by Scott Freseman and was approved by the Trustees 4-0. Respectfully submitted, Henry Maki