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Home My WebLink About2014-06-23 Police & Fire Pension Board Minutes City of Dania Beach Police and Fire Fighters Retirement System 113 S.W. 1 Street Dania Beach, Florida 33004 Phone: (954) 393-9061 E-mail: PFPENS@gmail.com MINUTES JUNE 23, 2014 I. CALL TO ORDER The meeting was called to order at 7:05 p.m. MOTION by Carolyn Jones SECOND: Roger Handevidt PASSED UNANIMIOUSLY MEMBERS PRESENT: MEMBERS ABSENT: Chairman Larry Rogers Wardell Lee Vice Chairman Todd Neal Mayor Walter Duke Secretary Vince Marlin Roger Handevidt Carolyn Jones Todd Lleras Rae Sandler ALSO PRESENT: Ken Harrison- Sugarman & Susskind, PA Melissa Algayer – Gabriel, Roeder, Smith & Company Jeff Amrose – Gabriel, Roeder, Smith & Company Cathy David – Administrator II. APPROVAL OF MINUTES MOTION by Vince Marlin to accept the minutes from the May 19, 2014 regular meeting as submitted. SECOND: Roger Handevidt PASSED UNANIMIOUSLY III. PUBLIC COMMENT The floor was open and no public comment. Page 2 of 3 IV. CONSENT AGENDA No items listed on the Consent Agenda V. OLD BUSINESS 5.1 GASB 67 Changes in Financial Reporting Chairman Rogers, Attorney Ken Harrison and the plan’s actuaries Melissa Algayer and Jeff Amrose opened discussion regarding the previous meetings with the City and the plan’s assigned workgroup about the GASB 67 Financial Reporting Changes and the City’s pension liability on the forthcoming financial statements. The focus used to be the ARC-Annual Required Contribution that the City had to contribute but this has changed to the plan’s liability. For information the plan adopted the following assumption and method changes to be phased-in over a four-year period beginning October 1, 2012. The assumed investment return was lowered from 8.0% to 7.0%. The mortality table was updated from the 1983 Group Annuity Mortality Table to the RP-2000 Combined Healthy Participate Mortality Tables. The Actuarial Cost method was changed from the Individual Entry Age Normal Funding method to the Aggregate Funding Method. With these changes the cost to the plan goes up every year. The investment return assumption we are currently at is 7.50% and we are fifty percent of the way through that change and also through 50% of the change with the mortality table. We are also fifty percent of the way through the assumption change to the aggregate funding method. Mark Bates has suggested that the assumptions used for GASB purposes which are irrelevant of funding but he believes that they should be in line with the funding assumptions so he tasked the plans GASB workgroup to come back to the board after the meetings with the City and either recommend going forward more quickly with the assumptions changes that we are currently fifty percent of the way through or if we are going to continue down the path of lowering the assumptions by ¼ a year. His suggestion was to stop at the 7.5% for the investment rate of return. Page 3 of 3 We are currently 50% way through to lowering the rate to 7.0% by lowering it ¼ each year. Melissa believes that we should not stop phasing in our funding assumptions just to be in line for GASB purposes. GRS is using for 2013 where we are in that point of time and do not reflect that we are lowering our assumptions. We ordinarily just reflect what are 10/1/2013 assumptions are and roll it forward to 9/30/2014 and that would be the GASB 67 information what they would prepare. The plan’s GASB workgroup/committee recommended the following: Investment Rate Assumption – recommends for funding staying on the current course and continuing to lower the investment rate by .25 basis points or ¼ of percent a year for the next two years until it reaches 7.0%. The investment rate is currently at 7.5%. The October 1, 2014 rate would be 7.25% and then the October 1, 2015 rate would change to 7.0% and stay there. MOTION by Vince Marlin to continue our current path by reducing the investment rate of return by ¼% a year for the next two years - October 1, 2014 will be reduced to 7.25% and October 1, 2015 will be reduced to 7.0% SECOND by Todd Neal PASSED UNANIMIOUSLY Mortality Table – recommends accelerating the phasing in of the RP2000 mortality table for funding and making the final change this October 1, 2014 rather than spread it out over the remaining two more years. MOTION by Vince Marlin that we immediately assume the RP2000 Mortality Table this year on October 1, 2014 as recommended by Melissa Algayer and Jeff Amrose from Gabriel, Roeder, Smith & Company, the plan’s actuaries. SECOND: Carolyn Jones PASSED UNANIMIOUSLY Page 4 of 5 Aggregate Funding Method- recommends accelerating the phasing in of this method from four years to two years. The plan has currently completed phasing in two of the four year assumption change. The final change would be reflected this October 1, 2014 rather than to spread the change over the remaining two years. MOTION by Vince Marlin to accelerating the phasing in of the change from the Entry Age Funding Method to the Aggregate Funding Method SECOND: Roger Handevidt PASSED UNANIMIOUSLY These changes will be reflected starting in the October 1, 2014 Actuarial Report. VI. NEW BUSINESS 6.1 Fiduciary Liability Insurance Renewal The plan’s fiduciary liability insurance is due to be renewed on July 1, 2014. The administrator received various quotes and the best premium is with the plan’s current carrier issued by Alterra America Insurance Company with the producer United Members Insurance, Inc. and the insurance representative Ullico Casualty Group, Inc. The premium is $5,091.66 with $1,000,000 aggregate limit of liability for all loss. MOTION by Vince Marlin to continue the plans fiduciary liability insurance with the current carrier Alterra America Insurance and producer United Members Insurance, Inc. with the insurance representative Ullico Casualty Group, Inc. and pay the $5,091.66 premium. SECOND: Carolyn Jones PASSED UNANIMIOUSLY 6.1 GRS Actuarial Bills for Special Meetings with City The plan received 2 bills for attendance at three of the special GASB Meetings with the City. The total is around $4581.00. MOTION by Vince Marlin to pay Gabriel, Roeder, Smith & Company bills for the special GASB meetings with the City SECOND: Carolyn Jones PASSED UNANIMIOUSLY Page 5 of 5 VII. CORRESPONDENCE 7.1 ICMA May 2014 Letter on 415 Limits The administrator received a letter from ICMA-RC which discusses recent guidance from the IRS and indicates that amounts transferred from a defined benefit plan to a defined contribution DROP account are generally considered to be contributions subject to the 415 annual addition limits with $52,000 being the limit in 2014. Previously, treating such contributions as plan-to-plan transfers which are not subject to limitations, rather than contributions, was generally believed to be permissible. The current three DROP participants that deposit their monthly DROP amount into their individual accounts at ICMA-RC. Attorney Ken Harrison recommends staying the course and wait until the final IRS ruling is released. Jeff Amrose comments that there are actions that can be taken when the final ruling is issued. It is possible that the IRS formal decision is approximate 18 months away. VIII. RETIREMENTS/TERMINATION 8.1 Pedro Heng Pedro Heng entered the DROP on June 1, 2014 MOTION by Roger Handevidt to ratify Pedro Heng’s June 1, 2014 retirement and entry into the DROP SECOND: Todd Neal PASSED UNANIMIOUSLY IX. OPEN DISCUSSION AND INFORMATION 9.1 Attorneys Report Legislative Report Nothing happened with the past legislative session in Tallahassee referencing public pensions although there were several pension bills that were opened. 9.2 July 21, 2014 Trustee Meeting Chairman Rogers discussed with the trustees the July 21, 2014 meeting. The July 21, 2014 meeting will be cancelled if nothing important comes up. X. ADJOURN MOTION by Vince Marlin to adjourn meeting at 8:30 pm SECOND: Roger Handevidt PASSED UNANIMIOUSLY