PB 08/16/2011 Minutes - Laserfiche WebLink

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Police/Fire Pension Board Meeting June 14, 2011 Page 4 must be valued a second time to compare the individual plan's rate of return to the 7.75% rate of return that Florida Retirement System uses for plan performance. Mr. Christiansen suggested that an addendum be done to Foster & Foster's contract to incorporate this price increase. Using the 7.75% rate of return is for informational purposes only, but must be included the actuarial valuation. If the Board should choose to use the state's rate of 7.75%; the additional 10% fee would not apply. However, lowering the expected rate of return to 7.75% would cause the annual required contribution by the City to increase $80,000. Mr. Christiansen will prepare an addendum & direct Foster & Foster to remit the addendum to the Board for signatures. Mr. Newlon suggested that the Board may want to do a Request For Proposal for actuarial services next year in order to determine if Foster & Foster's fees are still comparable. Mr. Christiansen can provide a list of the actuaries in the state for consideration. Motion: Mr. Strenth moved to accept Foster & Foster's increased fees and to direct Mr. Christiansen to prepare an addendum to the contract to include the fee increase. Mr. Stewart seconded the motion and it carried unanimously on 4-0 voice vote. B. Terminated vested members are requesting an annual benefit calculation statement in the year they terminate employment with the City. There are seven terminated vested members who are affected by this. This will show when dates and amounts eligible for early or regular retirement, but the amounts are fixed & will not change. Mr. Christiansen suggested the plan provide this valuation when the person terminates, but these people would not receive an annual report. Motion: Mr. Hettler moved that upon the termination of any member who is vested, the plan immediately authorize the actuary to perform a benefit calculation for that person. Mr. Stewart seconded the motion. It passed unanimously with a 4-0 voice vote. C. Mr. Layton & Mr. Pederson, terminated vested members are requesting to withdraw their investment in the plan and reinvest it into a similar plan. Mr. Layton & Mr. Pederson are the first retirees of the plan. They can roll over their own contributions, but cannot roll over the full value of their plan balance which includes their pension benefit. Mr. Christiansen does not suggest that the plan allow a withdraw of the full amount invested by terminated vested members. Mr. Christiansen informed Mr. Layton and Mr. Pederson that the prior motion would provide the information they are requesting. They also requested the plan be changed to allow an investment plan similar to one offered by Florida Retirement System, which allows a one-time option to convert retirement money into an investment plan, which is more like a defined contribution plan rather than the defined benefit plan of the City's pension plan. Mr. Christiansen informed the former employees that the board cannot allow this because it is a defined benefit plan according to section 175/185. If the City structured their plan in that manner, they would forfeit state contributions to the plan. A partial lump sum option would allow a member to withdraw 25%, but the City's plan does not allow for that at this time. A discussion ensued about whether this would be beneficial for the plan members or if the plan should be changed to allow a member to take a lump sum distribution and what the impact would be to the pension plan. The discussion was tabled & the board directed staff to request Foster & Foster to discuss this matter at the next meeting. Motion: Mr. Strenth moved to table the discussion until the next meeting. Mr. Hettler seconded the motion. It passed unanimously with a 4-0 voice vote.