MINUTES OF THE REGULAR MONTHLY MEETING
GENERAL EMPLOYEES RETIREMENT BOARD
TUESDAY, JULY 21, 2009
The Board of Trustees of the General Employees Retirement Fund convened in a regular session at 1:00 p.m. on this the 21st day of July, 2009, in the Fifth Floor Conference Room, Tampa Municipal Office Building, 306 E. Jackson Street, Tampa, Florida, with John Tapley, Chairman, presiding. Members present upon roll call were Ernest Cabrera, Alan Weiner, Bonnie Wise, Jerry Winters, Randy Goers, and John Tapley.
Steve Kenny was absent.
City Staff in attendance were Justin Vaske, Assistant City Attorney (ACA) and Board Attorney; Maria Rivera, Recording Secretary; Marlene Herrera, Payroll & Pension Supervisor; Deborah Hodo, Plan Investment Coordinator; and Lee Huffstutler, Chief Accountant.
Others in attendance were John Lessl, AON Consulting; Steven Lambert-Oswald, AON Consulting; Sharon Skrimshire, Retiree; Ben Pardo, Retiree; Robert Blanco, Retiree; Linda Fessel, Retiree; Grace Rickershauser, Spouse of Retiree; David Rickershauser, Retiree; Ken Souza, USF Foundation; Brent Wertz, Wertz York Capital; Jeff Hueniak, Wertz York Capital.
INTRODUCTION OF GUESTS AND VISITORS
David J. Rickershauser, Retiree:
Mr. Tapley introduced Mr. Rickershauser and stated that the Board had received a written request from him to speak at the Board meeting. He then asked Mr. Rickershauser to address the Board. Mr. Rickershauser stated that he preferred to speak at the end of the meeting.
APPROVAL OF MINUTES
Regular Monthly Meeting held on Tuesday, June 16, 2009:
Mr. Tapley asked if there were any corrections or changes to the minutes. Ms. Wise indicated that on page 2 there was a spacing error on the first paragraph; on the same page, the last paragraph should read Kimberly Crum, Director of Human Resources rather than Director of Personnel; and on page 4, Mr. Carrera’s name was misspelled.
Motion: (Carrera-Goers) Mr. Carrera made a motion to approve the Tuesday, June 16, 2009 General Employees Retirement Board Regular Monthly Meeting minutes with the noted corrections. Motion carried.
Investment Committee Meeting, May 19, 2009:
Mr. Tapley asked if there were any corrections or changes to the investment committee meeting. None were noted.
Motion: (Weiner-Goers) Mr. Weiner made a motion to approve the Tuesday, May 19, 2009 Investment Committee Meeting minutes. Motion carried.
STAFF REPORT
Listing of Conferences: presented for the Trustees information.
Investment Matters: Mr. Tapley indicated there was a listing of actions taken since the last Board meeting on investment matters for the trustee’s review. Ms. Wise stated she was pleased with this summary, and found it very helpful; Mr. Tapley concurred.
Update on Plan Coordiantor’s Position: Mr. Huffstutler indicated that the Plan Coordinator position had been advertised. He noted that in addition to the City of Tampa’s website, it was also being advertised on other sites like the FPPTA and FGFOA, and others. He also stated that the position had been upgraded a pay grade and that the qualifications now called for the candidates to have a financial background in addition to an accounting one.
Article: Mr. Tapley stated that the trustees received an article on Active vs. Passive Investment, and that this article was for information purposes only, as this topic had been addressed in a past Board meeting.
ClariVest Communication: Mr. Tapley stated that a letter had been received from ClariVest regarding a potential privacy policy breach. He indicated that this was for information purposes only.
Hartline/County Update: Ms. Herrera gave an update on Hartline’s deposits to invoices and Hillsborough County’s deposits. She stated that the Pension office has been invoicing them, and that they have been making their payments on schedule. There are 3 county employees that participate in the City’s GE Pension Plan.
Library/Hart Employees on DROP Update: ACA Vaske stated that he had researched Mr. Kenny’s question on whether Library and Hart employees that had chosen to stay in the City’s pension plan were eligible to participate in DROP. He indicated that this was allowed in the Special Act and proceeded to read the statute.
GE Pension Office Audit: Ms. Herrera informed the Board that the General Employees Pension Office will be audited by the City’s Internal Audit Department in the weeks to come. Ms. Wise indicated that they will be auditing the Pension office’s operations.
CONSENT AGENDA
WELLINGTON MANAGEMENT COMPANY’S $14,667.44 BILLING FOR THE QUARTER ENDING 3/31/2009; MERCER INVESTMENT CONSULTING’S $9,166.67 BILLING FOR THE MONTH ENDING MAY 2009; JERRY WINTER’S TRAVEL REIMBURSEMENT OF $463.45 FOR FPPTA 25TH ANNUAL CONFERENCE; $7,718.00 CITY OF TAMPA REIMBURSEMENT FOR THE MONTH OF JUNE 2009; COMSERV’S $55.00 BILLING FOR JULY 2009; LONGEVITY RETIREMENTS, DEFERRED RETIREMENTS, DEFERRED RETIREMENT OPTION PLAN (DROP) APPLICATIONS, AND SURVIVING SPOUSES’ BENEFITS.
Mr. Tapley asked Ms. Herrera if all Consent Agenda items were in order. Ms. Wise referred to the second item on the Comserv Report which stated that a pensioner had passed on 5/26/09 and that the July check had been stopped; Ms. Wise inquired about the June check. Ms. Herrera stated that she had confirmed that the June check had been stopped as well. Ms. Herrera indicated that all Consent Agenda items were in order.
Motion: (Wise-Carreras) Ms. Wise made a motion to approve the Consent Agenda. Motion carried.
NEW BUSINESS
Actuary 101 Session, and presentation of Actuarial Report for Fiscal Year 2010:
Mr. John Lessl, AON Consulting, created a sample scenario as an overview of how the Actuary develops the actuarial present value of benefits, the unfunded accrued liability, and how the plan is funded.
Mr. Lessl then proceeded to review the City of Tampa Actuarial Report for the Fiscal Year 2010 in detail. He stated that the Total Actuarial Present Value for Fiscal Year 2010 is $710M making the City’s contribution $20M for the upcoming fiscal year beginning October 1, 2009 to September 30, 2010. He indicated that this is an $8M increase from the previous year, and that this was mostly due to the fact that the investment performance was less than expected. Mr. Lessl stated that there has been pressure from the Division of Retirement to lower the actuarial assumption (which is currently 8%) as well as to require trustees to defend their assumptions more. There is also proposed regulation that would require trustees to sign off that their assumptions are reasonable for long time purposes. He indicated that if this was to materialize, it would increase the actuarial present value of benefits.
A copy of both presentations is available in the Pension Office for review.
ACA Vaske report on document received from Richard McIntyre, Esquire, counsel for Mrs. Beverly Terp:
ACA Vaske indicated that the pension office has received a document from Mr. McIntyre’s office on behalf of Mrs. Terp who is seeking a DEC Action to determine her benefits under the Pension Plan. He has briefed the litigators in the legal department who are reviewing the same and will respond to Mr. McIntyre.
Board approval and Chairman’s signature of Resolutions for: Waddell & Reed, Dodge & Cox, and Fisher Investments:
Ms. Hodo indicated that resolutions approving exceptions to the guidelines of the Statement of Investment Policy for Waddell & Reed, Dodge & Cox, and Fisher Investments and approval of Wellington Investment’s contract were being presented for Board approval and Mr. Tapley’s signature.
Motion: (Wise-Goers) Ms. Wise made a motion for Mr. Tapley to sign the resolutions approving exceptions to guidelines for Waddell & Reed, Dodge & Cox, and Fisher Investments and approval of Wellington Investment’s contract. Motion carried.
Board approval and Chairman’s signature of final Statement of Investment Policy:
Ms. Hodo indicated that the final Statement of Investment Policy was being presented for Board approval and Mr. Tapley’s signature. The Board members will review it and approve it at the next Board meeting. Ms. Hodo indicated that it did not have to be submitted to Tallahassee until 9/16/2009.
Pension Legislation Status:
ACA Vaske indicated that we had a bill that had gone to the legislature to amend the plan on some IRS required issues. Outside counsel had drafted the bill but the same was not clear to the them so ACA Vaske has been assigned to create a new draft to resubmit to the legislature.
Jerry Winter’s report on attendance to FPPTA 25th Annual Conference:
Mr. Winter’s stated that he had attended the FPPTA 25th Annual Conference in Orlando and learned of a new initiative by Mr. Ray Edmonson to have a regional coordinator who would serve as a liaison between the retirees and the general public and would relay new legislation information to them. Mr. Winters will be applying for this position.
OLD BUSINESS
Gaetano Dalfino’s Deferred Retirement Option Program Payment:
ACA Vaske indicated that outside counsel was presenting the City’s proposal to Mr. Dalfino’s attorneys.
$20,450.80 loss on conversion of 4,000 shares of Global Acquisition Corporation:
ACA Vaske indicated that the legal department litigators were still working on this matter.
Mr. Tapley asked Mr. Rickershauser to address the Board. Mr. Rickershauser stated that he had some questions to pose to the Board:
1. Mr. Rickershauser asked if the Pension Fund had a fiduciary obligation to its clients to be prudent and conservative with the investments of the people that are about to retire. He stated this was in reference to the DROP program.
Mr. Tapley indicated that the Board has an investment counsel out of Atlanta who guides the Board on all their investment decisions and has done so for more than the 6 years he has been a trustee.
2. Mr. Rickershauser questioned how the Fund had, from January 1st of this year to when he cashed out on 3/31, a 30% loss, when the stock market was up.
Mr. Tapley stated that the stock market was not up the first quarter of the year.
Mr. Rickershauser differed.
3. Mr. Rickershauser asked if they would not agree that 100% stock market is an inappropriate conservative investment for someone who is about to retire.
Mr. Tapley stated that the Fund has a broad diversification of investments and that that is how the Fund is managed. He indicated that there are 13 managers in a variety of disciplines intended to spread the risk. Mr. Tapley stated that we do not have 100% in any area but rather the investments are spread out. He indicated that we have 2 fixed income managers, and that in that regards we have a part of our fund in fixed investment; the rest is a broad diversification of equity investments.
4. Mr. Rickershauser stated that it was his understanding that the DROP program is lumped in with
the other Fund. Mr. Tapley agreed that that was the case. Ms. Wise clarified, and ACA Vaske confirmed, that our Act states that the DROP return is to be the same return as the Fund and not a separate Fund. She stated that there are other plans that do have the DROP as a separate fund, but our law does not allow for this. It could be modified in the future, but it is not how it stands at this time.
Mr. Rickershauser thanked the Board for their time.
Mr. Lessl stated that the Actuarial Report had to be approved by the Board so that it could be submitted to the State. There was discussion amongst Board members, after which it was agreed to review the report and approve it at the next Board meeting.
Mr. Huffstutler gave an update on the General Employees Retirement Education Plan (GEREP). He stated that the pilot was scheduled to be conducted on August 4, 2009, from 9 to 12 noon, at City Council Chambers, 315 E. Kennedy Blvd., 2nd Floor. The agenda will include presentations of the Plan by Mr. Huffstutler, the 457 Deferred Compensation Plan, and from Social Security. He stated that all City employees would be invited to the September workshop; however, the target audience for the pilot had been Human Resources Personnel, Fiscal Managers, and others that could provide feedback before the September general workshop session.
Mr. Goers stated that it would be helpful if the workshop contents could be posted in the Pension webpage. Ms. Rivera indicated that the staff from the web design division of T & I had already been contacted; that will be the next step to be implemented. Mr. Huffstutler indicated that the initiative’s Phase I was the creation of the program, Phase II was the implementation, and that Phase III would be an extension of the workshop through the website, flyers, a quarterly newsletter, and other communication tools.
Mr. Huffstutler stated that he was committed to an outstanding level of communication between the pension staff and the Board. He indicated that communications received at the pension office will be reviewed and forwarded to the Trustees if they merit doing so.
ADJOURNMENT
There being no further business to come before the General Employees Pension Board at this time, Chairman Tapley adjourned said meeting at 2:53 pm. on this 21st day of July, 2009.
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CHAIRMAN
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RECORDING SECRETARY
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PLAN COORDINATOR
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