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HomeMy WebLinkAbout2022-08-15 Webex Police & Fire Pension Board Minutes City of Dania Beach Police and Fire Fighters Retirement System 111 S.W. 1 Street Dania Beach, Florida 33004 Phone: (954) 393-9061 E-mail: pfpens@gmail.com Page 1 of 5 MINUTES AUGUST 15, 2022 HYBRID WEBEX MEETING I. CALL TO ORDER The meeting was called to order by Chairman Larry Rogers at 7:03 PM MEMBERS PRESENT: MEMBERS ABSENT Chairman Larry Rogers Carolyn Jones-excused Vice Chairman Todd Neal David Nuby, Jr.-excused Dean Harley Richard Tarrant Rae Lair Patricia Fuccile Rich Sieb ALSO PRESENT: Bob Sugarman - Sugarman & Susskind, PA Dina Lerner – Gabriel, Roeder, Smith & Company Frank DiPaolo – Finance Director – City of Dania Beach by Webex Steve Roth – Dahab Associates Cathy David – Administrator II. APPROVAL OF MINUTES MOTION: by Dean Harley to accept minutes from the May 16, 2022 meeting as submitted. SECOND: Rae Sandler PASSED UNANIMOUSLY III. PUBLIC COMMENT The floor was open for public comments. No members of the public are present IV. CONSENT AGENDA No items listed on the Consent Agenda V. OLD BUSINESS 5.1 October 1, 2021 Actuarial Report- Additional Benefit Dina Lerner from GRS reviewed with the trustees the impact statement that she prepared for the ordinance change that gives the retirees an additional benefit of $416.67 per month for life. These items had been discussed at previous trustee meetings. City Finance Director, Frank August 15, 2022 Page 2 of 5 DePaolo was asked if he had any questions. He inquired about the last time that the retirees had a cola. It has been over 20 years since the retired police & firefighters’ have received a cola. The trustees are grateful that the city has accelerated payments over the previous years to bring this plan to being fully funded. There is a small overfunded amount at this time. Frank reviewed with Dina and the trustees that what is being done is the actuarial assumptions are changed by lowering the assumed rate of return and the asset smoothing method is being reset to recognize the deferred investment gains. Frank was concerned that the recognized investment gains from resetting the smoothing method are hiding the true cost of the new benefit to the retirees. Dina informed everyone that the total impact of the additional benefit (as measured in the actuarial impact statement) is a $4.3 million increase in the present value of future benefits. Regardless of what happens with the investment markets, the true effect of this additional benefit is around $800,000 per year in additional annual unfunded liability amortization payments and normal costs. That would be the maximum addition to the City’s contribution requirement for 5 to 7 years (because the increase in the unfunded liability is being amortized over 5 years for police officers and 7 years for firefighters). Frank was concerned that if the markets were down and the funded ratio would drop to under 100% that the city would have to make up in contributions as well as the $800,000. Dina explained that the way investment gains and losses are incorporated into the contribution requirement is: you take the 1 year’s investment experience – any gain or loss that is above or below the assumed rate of return – and you would divide that by 5 (because you are recognizing 20% of it per year) and then you amortize that over a 10-year period, so that it is not a huge impact on the contribution requirement in the first year. The following year, you would recognize another 20% of that prior year loss, plus 20% of the current year loss or gain. If there is an offsetting gain, then the impact of the investment loss from the prior year would be washed out. The whole point of the smoothing method is that you mitigate the effects of short-term market volatility. Usually, you have offsetting gains and losses that will keep the contribution requirement from climbing over long periods of time. Also, we are lowering the assumed rate of return to 5.75%, which is a better, more reasonable assumption that should help alleviate some of the risk. Frank will put a meeting together with the city manager and Dina and himself to review everything. August 15, 2022 Page 3 of 5 VI. NEW BUSINESS 6.1 Dahab Associates – 3rd Quarter June 30, 2022 Performance Steve Roth from Dahab Associates discussed with the trustees the June 30, 2021 performance for the plan. The Plan had a -9.4% net of fees performance for the quarter April 1, 2022 thru June 30, 2022. The Plan’s earnings are -8.1% for the fiscal year to date October 1, 2021 to June 30, 2022 MOTION by Todd Neal to accept Dahab’s performance report SECOND: Rae Lair PASSED UNANIMIOUSLY 6.2 Dahab Associates – Rebalancing Steve Roth reviewed with the trustees rebalancing of the plan’s portfolio by moving $1,000,000 from Barksdale to cash and to request $1,500,000 from American Realty Core as we will receive the cash in increments. The plan’s cash account will be having DROP participants transferring their balances out of the plan, therefore the need for the money. MOTION by Dean Harley to accept Dahab’s recommendation of moving $1,000,000 from Barksdale to the cash account and to request $1,500,000 from American Realty Core SECOND: Todd Neal PASSED UNANIMIOUSLY 6.3 KSDT ENGAGEMENT AUDIT LETTER KSDT has submitted their September 30, 2022 Audit Management Engagement Letter for approval. The Plan’s Attorney reviewed the letter and a few revisions were made. MOTION by Rae Lair to have Chairman Rogers sign the Engagement Letter once it is negotiated between counsel and KSDT SECOND: Todd Neal PASSED UNANIMIOUSLY 6.3 Fiduciary Liability Insurance The fiduciary liability insurance was renewed for July 1, 2022 to July 1, 2023 with Markel American Insurance Company/Ullico Casualty Group through United Members Insurance Company. The coverage is for $2,000,000 limit of liability for all loss (aggregate); $200,000 for voluntary compliance program expenditure sub-limit; $5,000 each claim for self-insured retention. The invoice was for $8,548.42. MOTION by Rae Lair to approve the renewal of the fiduciary liability insurance. SECOND: Dean Harley PASSED UNANIMIOUSLY August 15, 2022 Page 4 of 5 6.4 Cyber Liability Insurance The cyber liability insurance was renewed for $2340.45 that covers the period September 11, 2022 to September 11, 2023 MOTION by Dean Harley to approve the renewal of the cyber liability insurance. SECOND: Rae Lair PASSED UNANIMIOUSLY 6.5 DROP Exit Valuation Date To help execute the new policy of crediting investment returns through the date the member requests to exit the DROP that was adopted at the May 16 2022 pension board meeting Dina is recommending to use the return as of the month end closest to the members DROP exit date. If a member’s DROP exit effective date is prior to the 15th day of the month we would use the return as of the month ending prior to that date. If the member’s DROP exit effective date is on or after the 15th day of the month, we would use the return as of the month ending after the DROP exit date. MOTION by Dean Harley to implement the decision made as the May 16, 2022 board meeting as to a choice of DROP exit dates. They can exit either at the end of a quarter or in the middle of the quarter. The DROP participant has to notify the administrator which choice they make before they exit the DROP. If the DROP participant chooses an intra-quarter DROP exit date, then the method of calculating will be the one presented in GRS’s email of June 7, 2022 which is mentioned above. SECOND: Rae Lair PASSED UNANIMIOUSLY 6.6 Office Equipment Discussion took place with the administrator as she had complete equipment failure and had to purchase a new phone, scanner and computer. VII. CORRESPONDENCE VIII. RETIREMENTS / TERMINATIONS IX. OPEN DISCUSSION AND INFORMATION 9.1 Attorneys Report Attorney Sugarman reviewed his firm’s activities with the plan in the preceding months. August 15, 2022 Page 5 of 5 9.2 FPPTA Trustee School The next FPPTA school will be October 2 to October 6, 2022 at the Renaissance Orlando at Sea World. MOTION by Rae Lair to approve expenses for any trustee wishing to attend the FPPTA School to be held at the Renaissance Orlando at Sea World Hotel on October 2 to October 6, 2022 in accordance with guidelines set forth in the Trustee Travel Rules. SECOND: Todd Neal PASSED UNANIMOUSLY IX. ADJOURN MOTION by Todd Neal to adjourn meeting SECOND: Rae Lair Meeting adjourned at 8.24 PM ANY PERSON WHO DECIDES TO APPEAL ANY DECISION MADE WITH REGARD TO ANY MATTER CONSIDERED AT THIS MEETING OR HEARING WILL NEED A RECORD OF THE PROCEEDING, AND FOR SUCH PURPOSE MAY NEED TO ENSURE THAT A VERBATIM RECORD OF THE PROCE EDING IS MADE WHICH RECORD INCLUDES THE TESTIMONY AND EVIDENCE UPON WHICH THE APPEAL IS TO BE BASED. IN ACCORDANCE WITH THE AMERICANS WITH DISABILITIES ACT, PERSONS NEEDING ASSISTANCE TO PARTICIPATE IN ANY OF THESE PROCEEDINGS SHOULD CONTACT THE ADMINISTRATOR OF THE CITY OF DANIA BEACH POLICE & FIREFIGHTERS' RETIREMENT SYSTEM OFFICE 111 S.W. 1st STREET, DANIA BEACH, FL 33004 PHONE (954) 393-9061AT LEAST 48 HOURS PRIOR TO THE MEETING.