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Home My WebLink About2000 05 02 Board of Trustees Special Minutes CITY OF WINTER SPRINGS MINUTES BOARD OF TRUSTEES - PENSION PLAN SPECIAL MEETING MAY 2, 2000 I. CALL TO ORDER The Board of Trustees - Pension Plan Special Meeting was called to order by Vice Chairman Robert Nippes Tuesday, May 2, 2000 at 7:35 p.m. in the West Conference Room of the Municipal Building (City Hall, 1126 East State Road 434, Winter Springs, Florida 32708). Roll Call Vice Chairman, Robert Nippes, present Board Member Mark Queen, present Board Member Vincent Giannoni, arrived at 7:37 p.m. Board Member Vernon Rozelle, present Board Member Mark Sardo, present Also Present Mr. Ronald W. McLemore, City Manager Mr. Gene DeMarie, General Services Director .:..:. AGENDA NOTE: THE FOLLOWING ITEMS WERE DISCUSSED, AS DOCUMENTED. .:. .:. II. ELECTION OF OFFICERS A. Election of Chairperson "I WOULD NOMINATE MR. NIPPES TO BE CHAIRMAN." MOTION BY BOARD MEMBER ROZELLE. SECONDED BY BOARD MEMBER SARDO. DISCUSSION. VOTE: THE BOARD AGREED BY CONSENSUS. MOTION CARRIED. CITY OF WINTER SPRINGS MINUTES BOARD OF TRUSTEES - PENSION PLAN SPECIAL MEETING - MAY 2, 2000 PAGE 2 of5 B. Election of Vice-Chairperson "I WOULD LIKE TO MAKE A MOTION FOR VERNON ROZELLE TO BE VICE-CHAIRMAN." MOTION BY CHAIRMAN NIPPES. SECONDED BY BOARD MEMBER SARDO. DISCUSSION VOTE: THE BOARD AGREED BY CONSENSUS. MOTION CARRIED. III. REGULAR AGENDA A. Consideration of Changes To Employee Pension Benefits Mr. Ronald W. McLemore, City Manager thanked the Board Members for meeting tonight. Manager McLemore began with a "background" of the City's Pension Plan, and how the City has progressed from having no retirement plan to the Defined Contribution Plan which started at a 2% contribution and grew to 4%, then to 6%. Manager McLemore further informed the Board of his goals to review the entire pension system; to try to improve it and bring it up to par with other communities; his concern with retaining employees, (including Police and Fire); a 60% - 70% turnover rate in the Police Department; which was a real issue; laws pertaining to Police and Fire; the State Retirement System; that many Police and Fire organizations having "very rich retirement plans anywhere from 18-26% of salary going in"; older employees and retirement plans; annuities; recruiting and retaining Police and Fire employees; enriching the Defined Contribution Plan; and surveying other plans. Discussion continued regarding the "Floor Offset Plan"; annuities; accumulating dollars; the Floor Offset Plan solving the problem of "stranded employees"; Unions; Firefighter Associations; the market being "volatile"; quarterly reports; yearly actuarial analysis; studies that increase contribution; competition in the marketplace; the Defined Benefit Plan being phased out; and possibly being a "Pure Defined Contribution Plan ten to fifteen years from now." Manager McLemore further spoke on what he had been asked to look at, regarding a 3% annuity of benefit; options of "funding today forward"; and "past service. " Manager McLemore then discussed a May I, 2000 Memorandum which he distributed to Board Members. Specifically discussed was a spreadsheet entitled "City of Winter Springs Defined Benefit Pension Plan Cost of Benefit Increase." CITY OF WINTER SPRINGS MINUTES BOARD OF TRUSTEES - PENSION PLAN SPECIAL MEETING - MA Y 2, 2000 PAGE 3 of5 Further discussion ensued regarding the current plan as identified on the spreadsheet; unfunded liability; percent of current payroll to the Defined Benefit Plan; percent of payroll to the Money Purchase Plan; 10% total contribution; 8% paid by the City and 2% paid by the employee; Items "B" and "C"; the current plan taking 3% "going forward"; increasing contributions; Floor Offset Plan; providing options; and "zero unfunded liability." Manager McLemore stated "Of all the options that are out there, the one that takes the least amount from the employee obviously would be 2% to date and 3% forward on a Defined Benefit Plan scenario only."Further discussion ensued regarding the Defined Benefit Plan; options; costs; the impact to the City; other plans; and previous service "buy-back". Manager McLemore presented to the Board the following concerns: "Which one do we want to choose"; "Who pays the differential"; and "How do we get to that decision." Further items discussed were meetings with employees; vote of employees; recommendation by the Pension Board; Public Hearings; feedback from employees; the City Commission; the 8% City contribution; fiduciary responsibility; and "What is the best plan from a pure economic point of view." Mr. Gene DeMarie, General Services Director informed the Board of the May 15, 2000 City Commission Workshop related to the Pension Issues and the Salary Compensation Package. There was continued discussion on salaries; salary compression issues; going beyond an annuity of 80%; social security; retirement systems; 3% annuity; income after thirty years; doing more than we are doing; private sector; unions; the State Legislature; retaining employees; funding the plan; participatory issues; fund floor asset; salary adjustments and equity; merit system; performance reviews; Pension Board recommendation; the decision being employee driven; contributing 2%; the meeting of the 15th as being critical; being competitive in the marketplace; demand for labor; providing a decent annuity; viable options; projected potentials; the current plan administrator; falling below indexes; investing in equities; ICMA and accessing information; and proprietary funds. Tape I/Side B The Board discussed whether they were prepared to make a recommendation to the City Commission at this time. After further discussion regarding growth of the City; employee base; and expanding Police and Fire issues, the Board was prepared to make the following recommendation: A MOTION WAS MADE TO "ACCEPT OPTION 'D' AS A RECOMMENDATION, WITH A 1% CONTRIBUTION BY THE EMPLOYEE, AND IF THEY WANTED TO GO FURTHER, THEN THAT CITY OF WINTER SPRINGS MINUTES BOARD OF TRUSTEES - PENSION PLAN SPECIAL MEETING - MA Y 2. 2000 PAGE40f5 IS UP TO THEM." MOTION BY BOARD MEMBER GIANNONI. SECONDED BY BOARD MEMBER QUEEN. DISCUSSION. VOTE: THE BOARD AGREED BY CONSENSUS. MOTION CARRIED. Discussion ensued regarding Purchased Money Plans; "457" plans; what the employer is reasonably supposed to do; employers not going backwards, only going forward; collective bargaining sessions; and Public Hearings. Chairman Nippes inquired whether any Board Member would like to make a procedural Motion, regarding the distribution of information and public contact with Pension Board Members. "I WILL MAKE A MOTION THAT IF INDIVIDUALS WISH TO MAKE COMMENTS TO INDIVIDUAL BOARD MEMBERS, THEY SHOULD MAKE THOSE COMMENTS DURING ONE OF OUR QUARTERLY MEETINGS. ALL BOARD MEMBERS SHOULD HAVE THE OPPORTUNITY TO HEAR THAT INFORMATION." MOTION BY BOARD MEMBER SARDO. SECONDED BY VICE CHAIRMAN ROZELLE. DISCUSSION. VOTE: THE BOARD AGREED BY CONSENSUS. MOTION CARRIED. There was a brief discussion as to when the next Board of Trustees Pension Board meeting would be scheduled; and when would the SunTrust representative be available to meet with the Board. .:..:. AGENDA NOTE: THE FOLLOWING ITEMS WERE DISCUSSED AS DOCUMENTED. .:. .:. Approval of the January 25, 2000 Regular Meeting Minutes "I MAKE A MOTION TO APPROVE THE JANUARY 25,2000 REGULAR MEETING MINUTES". MOTION BY VICE CHAIRMAN ROZELLE. SECONDED BY BOARD MEMBER GIANNONI. DISCUSSION VOTE: THE BOARD AGREED BY CONSENSUS. MOTION CARRIED. CITY OF WINTER SPRINGS MINUTES BOARD OF TRUSTEES - PENSION PLAN SPECIAL MEETING - MAY 2, 2000 PAGE 5 of 5 Manager McLemore then discussed with the Board a letter from Sandra R. Turner, from the firm "Retirement Plan Specialists, Incorporated" dated April 20, 2000. Specifically discussed were Items "D", and Options 1, 2, and 3; differentiating between Options 2 and 3; the perception of not losing the contribution; the 2% not being differentiated; converting annuity; needing more information on Options 2 and 3; and the Board's recommendation being half complete. After a brief discussion the Board agreed to a Meeting on Monday, May 15, 2000 at 4:30 p.m., prior to the City Commission Workshop which begins at 6:30 p.m. Chairman Nippes stated the meeting "Would be our normal quarterly meeting, plus dealing with Item "D" (from the April 20, 2000 letter received from the firm "Retirement Plan Specialist, Incorporated). IV. OTHER DISCUSSION ITEMS The Board did not discuss any other topics tonight. V. ADJOURNMENT "I MAKE A MOTION TO ADJOURN." MOTION BY BOARD MEMBER SARDO. SECONDED BY BOARD MEMBER QUEEN. DISCUSSION With consensus, Chairman Nippes adjourned the meeting at 9:25 p.m. Minutes Respectfully Submitted by: Tania Haas, Deputy City Clerk City of Winter Springs, Florida DOCSlboards/trustees/allllmi n utes/OS 0200. doc