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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. 1 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 2 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 3 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 4 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 1 c1 5