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City of Casselberry Police Officers' and Firefighters' Pension Board of Trustees Minutes of November 13, 2012 Meeting Page 3 of 7 have a slower growth economy, Manning & Napier will do better. When looking at the 5 to 7 year numbers, the plan is ahead of the index and in the top 40% of our peers. Galliard is currently 8 basis points below since inception. We are trying to recoup our losses from the credit crisis, but continue to watch Galliard to determine if a change is needed. At the beginning of 2011, PIMCO and Templeton were added to the Plan to enhance returns and diversify the portfolio. Both managers have achieved those goals. PIMCO is up 9.2% and Templeton is up 7% since inception. Both are outperforming the indexes. Templeton is the more bullish and aggressive manager. PIMCO is bearish and more conservative. Mr. Welker feels comfortable with this placement. C. Foster and Foster — Actuarial Services Mr. Patrick Donlan, representing Foster & Foster actuarial services, presented the 2012 Police/Fire Pension Plan Actuarial Report to the board electronically, reviewed it and provided copies for inclusion in the meeting packet. The City had lower than expected salary increases. There was an actuarial loss on the investment side, but a gain on the salary increases to offset the loss on the investment. This year the required contribution will be 30.4% of payroll and next year it will be 29.5 %. Members make '/z% contributions. State frozen monies total $183,117 which represents about 5.2% of payroll. Balance from City for current year is 24.7% of payroll. 23.8% of payroll for next year. Foster & Foster calculates the return differently from Bogdahn. Foster & Foster shows a return net of fees of 16.18% against an 8% return assumption. Chairman Pavlis questioned why the actuary report shows a 16% rate of return versus Bogdahn Consulting's 16.86 %. Foster & Foster does a dollar rated return and Bogdahn uses a time rated return. The City slightly over contributed for FY 2012 by $3,749 for the year due to using a percentage of payroll methodology. Membership went down during FY 2012 by 4 people. There were no retirees for FY2011, only terminated, but vested members. State monies went up about 8.2% for FY 2012. State monies are to be used for additional benefits for officers and firefighters over the 1999 premium amount. The frozen amount base line is $183,000. Any amount over $183,000 must go to benefits enhancement. The Plan is now holding $106,000 in reserve for benefit improvements. The State is re- looking at F.S. 99.1 to see if agencies can use excess to offset funding requirements. Due to police and fire contracts being updated, the plan needs to look at 300 hours sick and vacation. This will impact the actuary valuation for next year. Current assumption is that new retiree will receive 20% of a year's salary in lump sum sick and vacation that will be included in pension, now that amount will be frozen based on the effective date of the contracts. RMLO Rebecca Bowman stated that Mr. Donlan did provide the annual personal statements for plan members and those individual statements will be distributed to the members. MOTION: Member Hettler moved to approve the actuarial report as of 10/1/12, as presented. Motion was seconded by Member Stewart. Motion carried unanimously by voice vote 4 -0. D. Declaration of Rate of Return Based on the advice of the consultant, Board Members were required to declare an expect rate of investment return of 8% for the next year and following years in the long term. Mr. Welker stated that this is a reasonable rate of return.