HomeMy Public PortalAbout2021-06-08_Meeting_MinutesCITY OF CRESTVIEW GENERAL EMPLOYEES' PENSION TRUST FUND
PENSION BOARD OF TRUSTEES
QUARTERLY MEETING MINUTES
198 N. Wilson Street
Crestview, FL 32536
TRUSTEES PRESENT:
Tuesday, June 8, 2021, at 1:00pm
Joe Carr
Jerry Maughon
Chuck Powell
Gene Strickland
David Williams
TRUSTEES ABSENT: None
OTHERS PRESENT:
Tyler Grumbles, AndCo
Drew Ballard, Foster & Foster
Kim Kilgore, Foster & Foster
Stu Kaufman, Klausner, Kaufman, Jensen, & Levinson
1. CaII to Order — Chair Jerry Maughon called the meeting to order at 1:00pm.
2. Roll Call — As reflected above.
3. Public Comments — None.
4. Approval of Minutes
a. Kim Kilgore commented the prior administrator would be completing the drafted meeting
minutes for the September 1, 2020, December 1, 2020, and March 2, 2021 board meetings
to present at the next meeting for approval.
5. Reports (Attornev/Consultants)
a. Foster & Foster, Drew Ballard, Board Actuary
i. October 1, 2020 Actuarial Valuation Report
1. Drew Ballard reviewed his role as the actuary for the Plan.
2. Drew Ballard stated the contribution amounts presented in the report were
for fiscal year ending September 30, 2022.
3. Drew Ballard reviewed the minimum required contribution (MRC) as of
percentage of projected annual payroll had increased from previous
valuation from 19.00% to 19.40%. Drew further commented the City's
required contribution increased from 12.60% to 13.00%. Drew noted the
City had a shortfall contribution of $10,108.31 which would be due for the
fiscal year ending September 30, 2021.
4. Drew Ballard commented the increase in the MRC was primarily attributed
to an increase in the normal cost rate. Drew further commented the
increase was offset in part by net favorable experience.
5. Drew Ballard reviewed the plan experience was favorable overall with
sources of gain which included favorable turnover experience and an
investment return of 7.54% (Actuarial Asset Basis) which exceeded the
7.25% assumption. Drew further reviewed the gains were offset by a loss
associated with more retirements than expected.
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6. Drew Ballard commented there were no benefit changes but was an
actuarial assumption change to the assumed rates of mortality used in the
Milliman's July 1, 2019 FRS valuation report for non -special risk
employees.
7. Drew Ballard reviewed the minimum required contribution of 19.40% of
total annual payroll was the sum of the normal cost of 14.10%,
administrative expenses of 1.20% and the unfunded actuarial accrued
liability (UAAL) payment of 4.10%.
8. Drew Ballard stated the UAAL balance as of October 1, 2020 was
$2,033,087 with an annual payment due of $196,658.
9. Drew Ballard reviewed the fund's history of funding progress for the past
10 years with current funded ratio of 91.00%
10. Drew Ballard stated the need to review the plan's assumptions every 3 to
5 years for adjustments needed. Drew further stated the last experience
study performed for the plan was in 2016. Drew recommended to perform
an experience study which would cost $7,500 to complete.
The board approved the October 1. 2020 actuarial valuation as presented. upon motion by David
Williams and second by Gene Strickland: motion carried 5-0.,
The board approved for the actuary to complete an experience study as recommended by the
actuary. upon motion by Chuck Powell and second by David Williams. motion carried 5-0.
The Board voted the Declaration of Returns for the Plan shall be 7.25% for the next year. the next
several years, and the Iona term. thereafter net of investment related expenses. upon motion by
Chuck Powell and second by Gene Strickland ; motion carried 5-0.
ii. Online Member Portal demo
1. Drew Ballard gave a brief overview of the purpose of the portal and explain
the current process for members receiving a benefit calculation could take
up to 4 weeks to receive. Drew commented with the portal the members
could run unlimited instant estimates. Drew further commented currently
the member would pay the cost of any estimate over the two estimates
paid by the Plan.
2. Drew Ballard presented a live demo of the Foster & Foster portal and
commented it was very customizable and user friendly.
3. Drew Ballard reviewed the benefits of the portal for the members and the
administrator.
4. Drew Ballard commented the one-time implementation fee was $7,500
and the annual fee would be $8,500 for annual payroll updates or $12,500
for weekly payroll updates. Drew commented they would offer a 10%
discount on the annual fee if the Police Officers' and Firefighters' Plan
subscribed to the portal also. Drew Ballard stated the $7,500 would cost
around .20% of projected payroll for administrative expenses.
5. Drew Ballard stated included in the implementation fee there would be a
training seminar offered to educate the members on how to use the portal.
6. The trustees discussed the fees and the benefits to the membership. The
trustees would like to survey the membership and to further discuss at the
next quarterly meeting.
b. AndCo Consulting, Tyler Grumbles, Investment Consultant
i. Quarterly Report as of March 31, 2021
1. Tyler Grumbles reviewed the market environment during the past quarter.
2. The asset allocation by asset class for the fund was Domestic Equity at
48.40%, International Equity at 15.50%, Domestic Fixed at 22.70%, Non -
Core Fixed at 4.10%, Real Estate at 8.30%, and Cash at .90%. Tyler
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commented the asset allocation was in line with the Investment Policy
Statement and there was no need to rebalance.
3. Tyler Grumbles reviewed the financial reconciliation from the previous
quarter with a beginning market value of $22,830,884 on January 1, 2021
and ending market value of $23,524,172 on March 31, 2021. Tyler further
reviewed the financial reconciliation for the fiscal year with a beginning
market value of $20,907,266 and ending market value of $23,524,172 as
of March 31, 2021.
4. Gross earnings for the quarter were 3.14% outperforming the benchmark
of 2.71%. The trailing returns for the FYTD, 1, 3, 4, and 5-year periods
were 13.18%, 34.95%, 10.70%, 10.65%, and 10.69%. Since inception
(07/01/1998) returns were 6.94%, outperforming the policy benchmark of
6.48%.
5. Tyler Grumbles reviewed each of the investment performance during the
past quarter and commented Templeton Global had been struggling with
trying to predict interest rates and then COVID caught them off guard.
Tyler commented we would be looking at a replacement today for
Templeton investment.
6. Tyler Grumbles commented the rest of investments overall had been
performing very well for the plan.
ii. Multisector Bond Search
1. Tyler Grumbles reviewed the investment options to replace the Templeton
Global Total Return Fund. Tyler presented the strategy investment names
of Brandywine Global — Global Opportunities Bond IS, Loomis Sayles
Bond N, and PIMCO Diversified Income Institutional.
2. Tyler Grumbles reviewed the management fees and investment
minimums of each investment manager presented.
3. Tyler Grumbles reviewed the firm, strategy, team, and portfolio
construction information on each investment presented for consideration.
4. Tyler Grumbles reviewed the current composition, statistics and sector
allocation and the trailing performance and rankings of each of the
investment managers presented.
5. Tyler Grumbles recommended PIMCO Diversified Income Institutional to
be considered to replace Templeton Global Total Return due to much
more of diversity approach without currency risk.
The board voted to approve the replacement of the Templeton Global Total Return investment with
PIMCO Diversified Income Institutional as recommended. upon motion by David Williams and
second by Gene Strickland: motion carried 5-0.
c. Klausner, Kaufman, Jensen, & Levinson, Stu Kaufman, Board Attorney
i. Records Management Liaison Officer (RMLO) Designation
1. Stu Kaufman reviewed the role of the Records Manager Liaison Officer for
the plan and recommended the Plan Administrator Foster & Foster to fill
this role.
The board designated the RMLO to be Foster & Foster. upon motion by David Williams and second
by Joe Carr: motion carried 5-0.
ii. Policy regarding contractual provisions for investment managers
1. Stu Kaufman commented his firm put together a policy for contractual
provisions for investment managers. Stu commented they wanted to
provide a document to all newly hired managers that outlined the
provisions they would need to agree to in order to work with the Board. Stu
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reviewed each of the items which would be included in the policy. Stu
confirmed the policy would not change any existing contracts.
The board approved the policy reaardina contractual investment manaaers as presented, upon
motion by Chuck Powell and second by Gene Strickland; motion carried 5-0.
iii. Updated Summary Plan Description (SPD)
1. Stu Kaufman reviewed the SPD was required to be updated and
distributed to the members every two years.
2. Stu Kaufman reviewed the main change was the maximum annual benefit
from the Plan increased to $230,000 on page 6.
The board approved the Summary Plan Description as presented. upon motion by David Williams
and second by Joe Carr: motion carried 5-0,
iv. Financial Disclosure Forms
1. Stu Kaufman reminded the trustees their annual financial disclosures were
due July 1s' and any penalties for late filing would be paid by the trustee
not the pension fund.
v. Legislative Updates
1. Stu Kaufman commented there were no bills passed that impacted
pension funds. Stu briefly reviewed SB84 which proposed closing the FRS
defined benefit plan to future general employees which did not pass.
6. New Business
a. New City appointed Trustee — David Williams
i. The board welcomed the new city appointed trustee David Williams to the board.
b. Election of Fifth Trustee
i. Kim Kilgore commented Jerry Maughon's term on the board had expired October
16, 2020 and she could not find record of his reappointment.
The board voted to elect Jerry Mauahon as the fifth trustee, upon motion by David Williams and
second by Chuck Powell; motion carried 4-0.
7. Old Business — None.
8. Consent Agenda
a. Payment ratification — Warrants #10
b. Invoices for approval — None
c. Fund activity report for April 1, 2021 — June 1, 2021
The Board voted to approve the Consent Aaenda as presented. upon motion by Gene Strickland
and second by David Williams: motion carried 5-0.
10. Staff Reports. Discussion and Action
a. Foster & Foster, Kim Kilgore, Plan Administrator
i. Update on Plan Administration transition
1. Kim Kilgore reviewed the current transition from the prior administrator to
Foster & Foster. Kim commented she would be picking up member
records and meeting with the prior administrator tomorrow to discuss any
pending items needed.
ii. Cyber Liability Insurance renewal
1. Kim Kilgore stated the cyber insurance policy with Lloyds of London had
increase in annual premium to $8,593.00. By consensus the board agreed
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not to renew the cyber policy with Lloyds of London due to the increase in
cost.
iii. SB534 posting requirements
1. Kim Kilgore stated the SB534 State required postings have been
published to the City's website.
iv. Upcoming Education opportunities
1. Kim Kilgore reviewed the upcoming FFPTA 37TH Annual Conference was
on June 27th through the 30th in Orlando, FL. Kim commented she would
register the trustees for the conference if they were interested in attending.
11. Trustee Reports. Discussion and Action — None.
12. Adiournment - The meeting adjourned at 2:20pm.
13. Next Meeting — August 31, 2021, at 1:00pm.
Res pectfully,sybmitted by:
Kilgorts, Ilan Administrator
Date Approved by the Pension Board:
Apprd by:
Maugho,, Chairman
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