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HomeMy WebLinkAbout2000 05 15 Board of Trustees Special Minutes CITY OF WINTER SPRINGS MINUTES BOARD OF TRUSTEES - PENSION PLAN SPECIAL MEETING MAY 15,2000 I. CALL TO ORDER The Board of Trustees - Pension Plan Special Meeting was called to order by Chairman Robert Nippes Tuesday, May 2, 2000 at 4:35 p.m. in the West Conference Room of the Municipal Building (City Hall, 1126 East State Road 434, Winter Springs, Florida 32708). Roll Call Chairman, Robert Nippes, present Vice Chairman Vernon Rozelle, arrived at 5:00 p.m. Board Member Vincent Giannoni, present Board Member Mark Queen, present Board Member Mark Sardo, present Also Present Mr. Ronald W. McLemore, City Manager Mr. Gene DeMarie, General Services Director Mr. Tim Nash, SunTrust Representative Ms. Sandy R. Turner, CPC QP A Approval of the May 2, 2000 Special Meeting Minutes MOTION BY BOARD MEMBER SARDO. "I MOVE TO APPROVE THE MAY 2, 2000 SPECIAL MEETING MINUTES." SECONDED BY BOARD MEMBER QUEEN. DISCUSSION. VOTE BOARDMEMBERQUEEN: AYE CHAIRMAN ROBERT NIPPES: AYE BOARD MEMBER GIANNONI: AYE BOARD MEMBER SARDO: AYE MOTION CARRIED. .:..:. AGENDA NOTE: THE FOLLOWING ITEMS WERE DISCUSSED, AS DOCUMENTED. .:. .:. CITY OF WINTER SPRINGS MINUTES BOARD OF TRUSTEES - PENSION PLAN SPECIAL MEETING - MAY] 5. 2000 PAGE 2 OF 4 II. REGULAR AGENDA A. Discussion of SunTrust's Financial Statements with STI Representative Mr. Tim Nash, SunTrust Representative gave an economic overview for the most recent financial quarter. He indicated and gave evidence that a lot has changed since March 31, 2000. A comparison was made to the S&P 400, 500 and 600 and Mr. Nash referred to what he presented as a "rotation" beginning in March. The significant NASDAQ sell off, which is heavily weighted with technology stocks, did not hurt the City as much as others, due to the City's diversification of funds. He went on to discuss the growth of "Mid Cap and Small Cap" stocks which he describes as value stocks, which should perform well in the next twelve (12) to twenty-four (24) months. Mr. McLemore departed at 4:40 p.m. Next discussed were various stocks performance levels; concerns about the Federal Reserve raising interest rates fifty (50) basis points and tying that into inflation concerns, coupled with low unemployment rates; and that the non-US. Market Overview showed that Japan's performance grew 1.1 percent (1.1 %). Mr. Nash then explained that the US. Fixed Income Market Overview showed that the bond portfolio "Has come back a little bit" in the March quarter; the Treasury Yield; the four worst performing stocks were technology companies which were the stock leaders in 1999; the account's individual performances; and the quarter and five year total returns being 6.53 16.06 percent, respectively. He stated "That as of March 31, 2000 the portfolio value was $3,901,850.31"; that the equity performance was "Up 8.9 percent (8.9%)"; that the High Grade Growth Fund; was up 22 basis points"; that the "Value stocks were down 3.6 percent (3.6%)"; that the International Fund was "Down about 1.3 percent (1.3%)"; and the Limited Cap Fund, "Which has clearly been one of the best performing asset classes in the portfolio was up 21.5 percent (21.5%)". Asset allocation, which is where the individual funds are invested was next elaborated upon; that the Limited Cap Fund has about a "Thirty percent (30%) weighted in the portfolio, which may be getting a little high"; and the Defined Benefit Plan, cash flow, and the overall activity of the plan. Mr. Nash spoke of the "individual fun sheets" which he felt showed why SunTrust "Pared back" on technology stocks feeling they were overvalued; he reviewed the holdings in the High Equity Income Fund and the International Equity Fund; the High Grade Bond Fund is concentrated with maturity's from the one to the ten year range; and if the investment policy has a ten percent at cost limitation, which "we may be bumping up against the limit". Mr. Nash departed at 4:55 p.m. CITY OF WINTER SPRINGS MINUTES BOARD OF TRUSTEES - PENSION PLAN SPECIAL MEETING - MAY 15, 2000 PAGE30F4 The Board discussed whether SunTrust invests in only their instruments; the expense of the administration of the pension fund; the rate of return of the fund during the past three years; and the "Percentage cap" ratios in the various funds. Mr. McLemore returned at 5:00p.m. Vice Chairman Vernon Rozelle arrived at 5:00 p.m. Discussion continued regarding that the allocations can be "rebalanced" every six months; cap ratios; reports; the inability to access the report by the internet; and the City Manager providing a copy of the administration costs to all Board Members. Ms. Sandy Turner arrived at 5:05 p.m. B. Discussion of Handling Employee Contributions Discussion ensued in reference to a letter from Ms. Sandy R. Turner, CPC QP A, the City's Actuarial. In the letter, Ms. Turner outlined three (3) options for the handling of employee contributions. The Board, Ms. Turner, and Staff discussed the aforementioned options, specifically: "rolling" into a defined benefit plan; a conversion feature to maintain account balances; vested balances; "cash-out" provisions; differences between the three (3) options; if employees can borrow against the plan; a "turnover table"; the money purchase plan; percentages employees would contribute to obtain any of the options; rates of return; "cash-out" options; past service credits; and that none of the options affect the "soundness" of the pension plan. MOTION BY BOARD MEMBER SARDO. "I MOVE THAT WE GO WITH OPTION THREE." SECONDED BY VICE CHAIRMAN ROZELLE. DISCUSSION. VOTE: THE BOARD AGREED BY CONSENSUS. MOTION CARRIED. Discussion ensued regarding Social Security; and the State's pension plans and policies. IV. OTHER DISCUSSION ITEMS This Agenda Item was not discussed. CITY OF WINTER SPRINGS MINUTES BOARD OF TRUSTEES - PENSION PLAN SPECIAL MEETING - MAY 15,2000 PAGE40F4 V. ADJOURNMENT With consensus from the Board, Chairman Nippes adjourned the meeting at 5:48 p.m. Minutes Respectfully Submitted by: Debbie Gillespie, City Clerk Office City of Winter Springs, Florida DOCSlboards/trustees/alll/minutes/05I 500.doc