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Home My Public Portal About2022-03-01_Meeting_MinutesCITY OF CRESTVIEW GENERAL EMPLOYEES' PENSION TRUST FUND PENSION BOARD OF TRUSTEES QUARTERLY MEETING MINUTES 198 N. Wilson Street Crestview, FL 32536 Tuesday, March 1, 2022, at 1:00pm TRUSTEES PRESENT: Joe Garr Jerry Maughon David Williams Chuck Powell Gene Strickland TRUSTEES ABSENT: None OTHERS PRESENT; Tyler Grumbles, AndCo Stu Kaufman, Klausner, Kaufman, Jensen, & Levinson Kim Kilgore, Foster & Foster Drew Ballard, Foster & Foster Gina Toussaint, City's Finance Director 1. Cali 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. November 30, 2021, quarterly meeting The minutes from the November 30. 2021. auarterlv meetina were approved as presented. upon motion by Gene Strickland and second by David Williams: motion carried 5-0. 5. Reports (Attorney/Consultants) a. Foster & Foster, Drew Ballard, Board Actuary i. Actuarial services fee letter 1. Drew Ballard commented Foster & Foster had been the Plan's actuary for 30+ years and appreciated their business. Drew reviewed the current fees for each service/item provided and the proposed changes. Drew reviewed the only time the hourly rate fee was used was for an item other than the regular services they provided. Drew further commented all service items including the hourly rates listed would be adjusted annually based on the Consumer Price Index for All Urban Customers (CPI-U) rate. Drew stated the proposed changes would be effective October 1, 2022 and first adjustment for CPI-U would be effective on October 1, 2023. David Williams asked if the actuary would consider a cap on the CPI rate. Drew explained whether the CPI went down or up the fees would also, so they decided not to consider the cap. The Board voted to approve the increase in actuarial fees. as presented. upon motion by Gene Strickland and second by David Williams; motion carried 5-0. 2. Stu Kaufman commented he would draft an addendum to the Actuary's agreement to be executed on these changes. b. AndCo Consulting, Tyler Grumbles, Investment Consultant 1 i. Quarterly report as of December 31, 2021 (Preliminary) 1. Tyler Grumbles gave a firm update commenting they had $123 billion in assets under advisement and have continued to reinvest 100% of net profits back into the company. Tyler reviewed AndCo had 87 team members and named two new partners this year. 2. Tyler Grumbles reviewed the market environment during the past quarter. Tyler Grumbles commented it had been a narrow market and reviewed the few names leading the charge. 3. Tyler Grumbles reviewed the Treasury Yield Curve (TYC), showing short-term interest rates went up and long-term rates stayed flat or went down. Tyler further commented the TYC was used by analyst to predict the future of the economy and where the bond market was going. 4. Tyler Grumbles commented the plan was up from $24.6 million to $25.8 million at the end of the quarter. The asset allocation by asset class for the fund was Domestic Equity at 47.10%, International Equity at 14.70%, Domestic Fixed at 20.80%, Non -Core Fixed at 3.80%, Infrastructure at 3.90%, Real Estate at 8.70%, and Cash at 0.90%. 5. Tyler Grumbles commented there was no need to rebalance as the asset allocation was in line with the Investment Policy Statement (IPS). 6. Tyler Grumbles reviewed the fund reconciliation for the quarter showing a gain of around $1.2 million. 7. As of December 31. 2021, the market value of the Fund was $25,809,262. 8. The gross earnings for the quarter were 5.14% slightly underperforming the benchmark of 5,15%. The trailing returns for the 1, 3, 4, and 5-year periods were 14.79%, 16.20%, 10.82%, and 11.79%. Since inception (07/01/1998) returns were 7.20%, outperforming the policy benchmark of 6.75%. 9. Tyler Grumbles reviewed each investment manager's performances for the quarter in the portfolio. Tyler commented they still had Dana Investments on watch. ii. Investment Policy Statement update 1. Tyler Grumbles commented the only change made to the current IPS was the assumed rate of return would not be identified as an actual percentage to eliminate the updates needed every time the rate changed. The Board ai «raved the Investment Policy Statement as uresentsd, upon motion by David Williams and second km Joe Carr: motioned carried 5-0, c. Klausner, Kaufman, Jensen, & Levinson, Stu Kaufman, Board Attorney i. Special Tax Notice update 1. Stu Kaufman reviewed the Special Tax Notice that must be given to any member who received a lump sum disbursement. Stu commented the required minimum distribution age was raised to age 72. Stu also reviewed the exceptions to the 10% additional income tax on early distributions of retirement funds. ii. Legislative update 1. Stu Kaufman commented the legislation session would end on March 11th and no bills had passed affecting pension plans. 2. Stu Kaufman reviewed pending legislation that would make COVID an ILOD disability presumption. Stu commented the bill did not make it out of committee, so it did not pass. 3. Stu commented the Florida Retirement System changed the DROP period for Special Risk from 5 to 8 years and it was expected the State would sign off on. 2 4. Stu Kaufman briefly reviewed a bill related to PTSD and Workers' Compensation. 6. New Business i. Contract renewal of Plan Accountant 1. Stu Kaufman reviewed the Police & Fire Board had approved not to entered into a new engagement letter with the current plan accountant. Stu recommended on waiting until the financials had been received through 9/30/2021 before terminating their services. 7. Old Business a. Annual audit update i. Gina Toussaint updated the Board on the audit. 3. Consent Agenda a. Payment ratification — Warrants #17, #18 and #19 b. Invoices for approval — None c. Fund activity report for November 24, 2021 — February 22, 2022 The Board voted to approve the Consent Agenda as presented. upon motion by David Williams and second by Chuck Powell: motion carried 5-0. 10. Staff Reports. Discussion and Action a. Foster & Foster, Kim Kilgore, Plan Administrator 1. Upcoming educational opportunities 1. Kim Kilgore reviewed the upcoming educational opportunities available to the Board. Kim commented the FPPTA 38th Annual Conference would be held June 26-29, 2022, in Orlando, Florida. 11. Trustee Reports, Discussion and Action a. Chuck Powell commented he would like to look at a normal eligibility other than age based. Chuck stated when a member started with the City at a younger age they would have to work longer to reach age 55. Chuck further stated these members would have to work over 35 years or longer to reach normal eligibility to enter DROP. b. Stu Kaufman reviewed the steps would be to ask Drew Ballard to conduct an actuarial study on the cost to add this provision to the Plan. Drew commented they would produce one study with different scenarios, first scenario at a cost of $1,000 and second scenario at a cost of $750. The Board recommended looking at normal retirement at 30 years of service regardless of age. Drew commented he would prepare the study and present at next meeting. The :oard voted to approve the cost of the actuarial study for normal eligibility at 30 vears of service regardless of age. upon motion by Chuck Pwell and second by David Williams: motion carried 5-0. 12. Adjournment - The meeting adjourned at 1:45pm. 13. Next Meeting — June 7, 2022, at 1:oopm. tfully s b itted by: Kilgor Pan 1. inistrator Date Approved by the Pension Board: Appro,; rs by: augh. !'`Chairman (a/3/(-31.0cac?,