ROCKLEDGE FIRE EMPLOYEES RETIREMENT BOARD MEETING MINUTES

Transcription

1 ROCKLEDGE FIRE EMPLOYEES RETIREMENT BOARD MEETING MINUTES Thursday, August 17, 2017 CALL TO ORDER The Rockledge Fire Employees Retirement Board held its quarterly meeting on Thursday, August 17, 2017 in the Council Chamber of Rockledge City Hall, 1600 Huntington Lane, Rockledge, Florida. MEMBERS PRESENT: STAFF/CONSULTANTS: Chairman Jeptha Sunday, Fifth Member Mike McCaleb, Fire Representative Ed Syfrett, Fire Representative Tim Matson, Resident Member Kenneth Harrison, Board Attorney - Sugarman & Susskind Chad Little, Actuary - Freiman Little Actuaries Dan Johnson, Investment Consultant AndCo Consulting Karan Rounsavall, Plan Administrator Matthew Trine, Finance Director Brenda Fettrow, City Manager Chairman Sunday called the meeting to order at 9:02 a.m. A quorum was in attendance. Note: There was a vacancy for a resident member. APPROVAL OF MINUTES A. Joint Quarterly Meeting of May 18, 2017 Member McCaleb moved to approve minutes for the May 18, 2017 joint quarterly meeting as submitted. Member Syfrett seconded the motion and it carried unanimously. OLD BUSINESS A. Discussion and possible action to allow cross credit between the City s various retirement plans for vesting purposes only (tabled at the May 18, 2017 meeting to allow staff input) Plan Administrator Rounsavall noted that staff communicated its support for the concept of cross credit between the City s retirement plans for vesting purposes only. Attorney Harrison advised that this could be considered a benefit change and as such was subject to collective bargaining. Further, there would be a cost to the respective plans, albeit de minimus. He offered to draft an ordinance to allow cross credit and provide it to all affected parties (i.e. city and bargaining units). Actuary Little mentioned that such an ordinance required an impact statement. Member Syfrett moved to authorize the attorney to prepare an ordinance providing for cross credit between the City s three retirement plans for vesting purposes only, to provide the draft ordinance to affected parties, and to bring the ordinance to the retirement board s next meeting for review and approval. Member McCaleb seconded the motion and it carried unanimously.

2 QUARTERLY MEETING MINUTES Page 2 of 5 B. Fee increase for Salem Trust Company custodial services This item was deferred at the May 18, 2017 joint meeting to determine whether or not Salem Trust could lower its fee if assets of all three retirement plans were combined. Mindy Johnson (Relationship Manager with Salem Trust) advised that the only way to manage a combined asset fee would be to convert to a la carte pricing. This resulted in a basis point fee on the combined market value of plan assets in addition to transactional charges (e.g. trades, benefit payments, vendor payments, etc.) So while the basis point fee might be lower, any potential savings would be lost on the transactional level. Member Matson moved to approve the proposed fee increase for Salem Trust as presented at the previous meeting, to-wit: five basis points on a market value up to $20 million with an annual minimum fee of $6,000. Effective date of July 1, 2017 with a three-year guarantee. Member Syfrett seconded the motion and it carried on an all yes vote. Attorney Harrison would prepare the appropriate revision to the custodial agreement with Salem Trust. NEW BUSINESS A. Approval of administrative expense budget for Plan Year 2017/2018 in accordance with Florida Statutes The Retirement Board was in receipt of the proposed budget for Plan Year 2017/2018 as prepared by the plan administrator. Pursuant to Florida Statutes (8), the Board was required to adopt and operate pursuant to an administrative expense budget each year. The budget included all administrative expenses (e.g. actuary, legal, investment consultant, custody, administration, insurance, etc.) but did not include investment management fees. The proposed budget for 2017/2018 was $105,100. Plan Administrator Rounsavall reviewed individual line items in the proposed budget and projected increases which included an additional $5,000 under legal expenses for restatement of the plan document. Expenditures for 2016/2017 were less than anticipated. Member Syfrett moved to approve the administrative expense budget as presented. Member Matson seconded the motion and it carried unanimously. The budget would be presented to the Rockledge City Council (plan sponsor), posted on the City s web site, and posted on the bulletin board at the various fire stations for plan members. B. Periodic review of professional service provider agreements Board members were in receipt of a listing of professional service providers and the corresponding agreement dates. Pursuant to its adopted policy, the board was to routinely review these agreements to determine appropriateness and timeliness of the terms. Upon review, the Board could elect to continue with that service provider, solicit bids or issue a request for proposal (RFP) or request for quotes (RFQ) for the professional services subject to review. The Board s agreements with Freiman Little Actuaries (plan actuary) and Sugarman & Susskind (plan attorney) were the oldest relationships that had not been reviewed. The last revisions to both agreements were done in November Mr. Little stated that his fee guarantee period had expired; he planned to bring a new fee structure proposal to the next meeting. Attorney Harrison noted that it was not uncommon for plans to request current quotes from other providers as part of the periodic review process. This was a task that could be handled by the plan administrator.

3 QUARTERLY MEETING MINUTES Page 3 of 5 Member Matson moved to direct the plan administrator to solicit requests for quotes (RFQ) from actuarial firms doing business in Florida and present the results at the next quarterly meeting. Member Syfrett seconded the motion and it carried on an all yes vote. REPORTS & COMMUNICATIONS A. Report: Performance Monitor & Investment Advisory Services (Dan Johnson, AndCo Consulting) 1. Performance Report for quarter ended June 30, 2017 Mr. Johnson delivered the Investment Performance Report for the third quarter of Fiscal Year 2016/2017. With less than two months remaining in the fiscal year, the portfolio remained in positive territory and on track to beat the assumed rate of return. International and emerging markets posted the best performance while domestic equities (S&P 500) were also up nicely for the quarter. Fixed income returns were negative for the quarter; this emphasized the importance of diversification into real estate, global fixed income, and tactical asset classes. Total market value as of June 30, 2017 was $10,838,133 up from $10,693,038 for the previous quarter ended March 31, On a percentage basis, the composite portfolio was up 2.94 percent for the quarter (gross) which ranked in the 53 rd percentile of public plans. For the fiscal year (nine months), the fund was up 9.13 percent. For the trailing 12 months, the fund was up percent (ranking in the 30 th percentile of public plans). Over the past three years, the fund was up 6.35 percent, ranking in the top 11 th percentile. The portfolio s value as of the previous day was $10,908,208. Quarterly performance results (i.e. quarter ending June 30, 2017) for the various investment styles/managers represented in the portfolio were as follows: Vanguard Total Stock Market Index Fund (domestic equity) positive return of 3.03% (38)* American Funds - Europacific Growth (international) positive return of 7.69% (12)* Garcia Hamilton & Associates (fixed income) positive return of 0.88% (81)* PIMCO Diversified Income Fund (global fixed income) positive return of 2.35% (44)* Blackrock Multi-Asset Income Fund (global tactical asset) positive return of 2.43% (46)* ASB Allegiance Real Estate Fund positive return of 0.66% (100)* (*Percentile rankings) Mr. Johnson discussed the underperformance of the ASB Allegiance Real Estate Fund since being added to the portfolio. He pointed out that ASB was a core real estate manager. Being such, there was less leverage risk in its portfolio and more leasing risk relative to some of its peers. Leasing income was the most important aspect of a core approach. The real estate portfolio was funded from assets taken from fixed income and had served to diversify the fund. No change in real estate manager was recommended. Attorney Harrison commended Mr. Johnson and AndCo Consulting on its continued good investment performance since taking on the Rockledge Retirement Plans four years earlier. The Fire Retirement Board acknowledged receipt of the investment performance report as presented.

4 QUARTERLY MEETING MINUTES Page 4 of 5 B. Report: Board Attorney (Kenneth Harrison, Sugarman & Susskind) 1. Legislative Update/Amendment to Public Records Act Board members were in receipt of the law firm s legislative update on amendments to the Public Records Act. Mr. Harrison reviewed changes to the public records law designed to minimize the filing of law suits due to frivolous public records requests intended primarily to cause a violation of the law and result in an attorney fee award. New legislation required the prominent posting of contact information for the agency s custodian of public records in the agency s primary administrative building and on the agency s website. It was important that the City comply with these new requirements. The attorney also pointed out that the City of Rockledge and the Rockledge Retirement Plans were separate legal entities. Plan Administrator Rounsavall advised that the city clerk served as the Records Management Liaison Officer (RMLO) for the Rockledge Retirement Plans. Mrs. Rounsavall routinely transferred records to the City s archives. 2. Status report on restatement of retirement plan document Attorney Harrison anticipated that a final draft of the restatement would be presented at the next quarterly meeting. He was still awaiting comments from trustees and other involved parties. 3. Update on Supreme Court Amicus Brief on tolling issue applied to securities litigation actions in CalPERS vs. ANZ Securities The Supreme Court s narrow decision on this litigation was an unfortunate development that imposed burdens on investors and fiduciaries. It did, however, provide clarity on an issue of great importance to institutional investors. The Rockledge Retirement Plans had supported the institutional investor amicus brief filed in this matter. C. Report: Actuarial Consultant (Chad Little, Freiman Little Actuaries, LLC) 1. Review of proposed restatement of retirement plan document Actuary Little sought the board s direction prior to reviewing the proposed restatement of the plan document for the Fire Employees Retirement Plan. It was a lengthy document and review of same involved hourly charges. Attorney Harrison noted that the restatement did not include any benefit changes. He would provide a written statement to the actuary along this line. In turn, Mr. Little would provide a quote for review/comment on the document. It was noted that retirement plan documents were not available on the Municipal Code Corporation s website (i.e. MuniCode), although the trust documents were available thereon. The trust documents were seriously out of date. 2. Request of IAFF Local 3138 to provide study on cost of increasing multiplier for plan members hired after October 1, 2012 Actuary Little received a request from the IAFF to prepare a study on a benefit modification for plan members. The actuary worked for the Retirement Board and sought the board s authorization to proceed with such a study for the union. Union President Matt Clark provided further clarification on the request and indicated that the cost of such a study would be at the union s expense.

5 QUARTERLY MEETING MINUTES Page 5 of 5 Member McCaleb moved to authorize the actuary to proceed with the IAFF s request for a benefit study as outlined above. The cost of the study would be borne by the union and a copy of same provided to the retirement board. Member Syfrett seconded the motion and it carried unanimously. Actuary Little went on to comment on correspondence from the Division of Retirement (dated August 10, 2017) which stated that all actuarial statements through October 1, 2015 were state accepted. The correspondence included several items of interest which were to be addressed in future reports. These comments included investment return assumption and mortality assumption. D. Plan Administrator (Karan Rounsavall) 1. Educational Opportunity: Florida Public Pension Trustees Association (FPPTA) Fall Trustees School in Tampa (October 8 11, 2017) 2. Educational Opportunity: Florida Division of Retirement Annual Police Officers & Firefighters Pension Conference in Orlando (November 15-17, 2017) If any member wished to attend either event, they were to contact the plan administrator at their earliest opportunity. It was noted that the Retirement Division s conference conflicted with the date of the next quarterly meeting (i.e. November 16, 2017). 3. Pending receipt of 2016 premium tax distribution in the amount of $134, Plan Administrator Rounsavall announced the expected receipt of state monies pending approval of the 2016 annual report. 4. Provision of divorce kit as prepared by board attorney to plan participants or retirees upon request Member McCaleb moved to authorize the plan administrator to customize the divorce kit for the Fire Retirement Plan and include it with other available forms. Member Syfrett seconded the motion and it carried on an all yes vote. 5. Joint quarterly meeting scheduled for November 16, 2017 at 10:00 a.m. The next quarterly meeting would be a joint meeting of all three retirement boards. PUBLIC COMMENT - None ADJOURN The meeting adjourned at 10:47 a.m. Submitted by: Karan Rounsavall Plan Administrator Approved by: Jeptha Sunday, Chairman