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HomeMy WebLinkAbout1995 10 24 Board of Trustees Regular Minutes MINUTES BOARD OF TRUSTEES WINTER SPRINGS PENSION OCTOBER 24, 1995 MEETING 1. Call to Order: Chairperson Hoffmann called the meeting to order at 7:30 p.m. in the conference room of city hall. 2. Roll Call: City Officials. present: Brian Fricke, present Joel Berk, absent Ralph Bowman, present Si Berman, absent Chairperson Art Hoffmann, present John Govoruhk, City Manager Tom Lang, City Attorney Sun Bank Representative, Bill Breda, Jr. was also present at the meeting. 3. Approval of August 15. 1995 Minutes: Hoffinann asked if there were any comments or corrections to the minutes. There were no comments. The minutes stand approved as read. 4. Ouarterly Review of Trust Finances with Bill Breda. Jf. of Sun Bank: Breda distributed copies of the Investment Performance Report, then reviewed the report with the board members. Attorney Lang stated that the city may have a problem with Time Warner Cable down the road, and would like to get out of that position for political reasons. Breda said that he would communicate the city's sensitivity. Hoffinann asked for recommended changes of our strategy in terms of the distribution of investments. Breda said that the asset allocations are left up to the client, but the pending change will be rebalancing the growth value area. Hoffinann asked for figures on the turnover rate for the quarter or year. Breda stated that the funds tend to be high in turnover. Trade is between 4 and 5 1/2 cents per share. In the growth fund, SunTrust tries to emphasize the large cap. The value fund is typically a by-product of what is cheap. Hoffinann asked how other investment agencies have done compared to the S&P. Breda stated that the S&P is a pretty good performer relative to most money managers; kind of a hard target to beat. The value fund has done a little better than average relative to other value funds; the growth fund has under performed. MINUTES BOARD OF TRUSTEESIWINTER SPRINGS PENSION OCTOBER 24, 1995 MEETING PAGE 2 Hoffinann asked ifthere would be any changes or improvements, with the new manager, in the way the funds are being handled. Breda did not think there would be any major changes. Bowman asked if the market will continue to grow. Breda said there is still an up side, but not at the same rate. Stocks are up on price basis to 25% and dividends are up close to 30%. Lower interest rates have helped. Earnings have been rising, but the momentum in the growth rate of the earnings have slowed. Hoffinann asked Breda ifhe sees any change in strategy that investors may be using due to elections coming up. Breda said that they don't try to invest around politics. The area of most concern is the retail. 5. Presentation by Attorney Lang regarding Pension Agreement Revisions: Lang distributed copies of the revised Fifth Amendment to the amended and restated Money Purchase Pension Plan. Section 601 is the determination of distribution of benefits. The plan as currently written states that if a participant terminates his employment with the employer upon or at obtaining his retirement age, all amounts credited to such participants employer contribution account as of the next succeeding anniversary date shall be distributed by the trustee. The amendment now will read "evaluation date" instead of "anniversary date". Hoffinann said the problem was that people would not be able to receive their vested amounts until the next evaluation date: as much as eleven months. Lang said that by changing the wording to evaluation date makes it a six month period. There would be two evaluation dates (six and twelve months). Hoffinann asked about the amount of funds that were vested from the preceding evaluation date to the date of retirement. Lang said that the subject was not addressed in the amendment that was circulated to him, other than 605 gives the fully vested benefits upon attaining retirement date. What will happen is that it will cut off, and you're going to kick over to 605 as of your retirement date, but you will not get any additional contributions after the last evaluation date if the word "preceding" is used. If the intent is to let them go through the next evaluation period, then what happens is they will get a contribution as of the next evaluation period, covering the period that they were in the plan after the last evaluation period. It is not in this amendment; it would have to be added. Hoffmann asked about an option: "Take out what you have up to the preceding evaluation period, then wait until the next evaluation period for the remaining contributions; or wait until the next evaluation period and take it all." (normal retirement) He asked about voluntary leaving and having vested amounts. Lang said that takes you back to 605 automatically. Lang asked, "you are approving the change to 601 that would allow you to take out that which is vested as of the MINUTES BOARD OF TRUSTEES/WINTER SPRINGS PENSION OCTOBER 24, 1995 MEETING PAGE 3 evaluation date preceding retirement; and you have an option as to whether you then wait and take the residual on the next evaluation date, or whether you wait and take it all on the next evaluation date?" Hoffman said, that is correct. Lang said the sixth amendment deals with article four which is allocation of contributions-earning and forfeitures. This amendment has to be approved in order to get the wording changed from anniversary to evaluation for consistency. The underlined portion on the sixth amendment was previously approved, but not placed. Lang stated that it will be placed as the second sentence in 401(e). Lang said that he will revise the Fifth Amendment. Motion: Approval of the sixth amendment subject to the typographical corrections. Fricke motioned. Bowman seconded. Vote: Hoffmann, aye; Fricke, aye; Bowman, aye. Motion carried. Lang mentioned a question in a letter that Hoffmann had sent to him regarding the second amendment. The second amendment reads quarterly. Ifa change is needed, then Lang would have to structure a seventh amendment that eliminates the option of making the contribution quarterly. Hoffinann stated that for the past couple of years, the contributions have been paid per period (every two weeks). Fricke asked if the contributions are city funded with employees not making any contributions. Hoffinann said, "that's right". Lang said that the resolution that was passed does not include quarterly, but the amendment does. Fricke said that it makes sense to have the flexibility from the investment perspective. The board agreed to leave the option of "quarterly" in the amendment. Lang said that Hoffinann also wanted to know if it should be changed to allow them to be paid within 60 days after the time that they terminate or should they have to wait until the end of the year to get their payment. It is now structured that it would be 60 days after the end of the plan year. For six months they would not be a participant, but couldn't get their money out. This is termination for any reason other than death, total and permanent disability or retirement. Hoffinann asked Lang to conceptually change "Plan year" to read "Evaluation date". Lang mentioned that this would also affect Section 204 when talking of the termination, and Section 605 when talking about when they have to get paid. MINUTES BOARD OF TRUSTEESIWINTER SPRINGS PENSION OCTOBER 24, 1995 MEETING PAGE 4 6. Old Business: No Comments 7. New Business: No Comments 8. Adjournment: Chairperson Hoffinann adjourned the meeting at 8:05 p.m. APPROVED: Art Hoffmann, Chairperson attest: Martha Jenkins, Deputy City Clerk