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Clermont Fire 11-20-2020 Quarterly Meeting Minutes6'- LE00N Retirement Plan & Trust for Firefighters of the City of Clermont C T Minutes Quarterly Meeting Choice of Champions November 20th1 2020 1. Chair Judd Lent called a Quarterly Meeting of the Firefighters Retirement Plan Board of Trustees to order at 11:06 AM on November 20, 2020 in Council Chambers at the Clermont City Hall. Mr. Baur called roll on behalf of the Board. Those persons present included: TRUSTEES OTHERS Judd Lent, Chair Scott Baur & AC Lovingood, Administrator (Resource Centers) Ryan Moore Mitchell Brennan, Investment Consultant (BCA) Judy Proli Bonni Jensen, Attorney (Klausner, Kaufman, Jensen, & Levinson) John Rhames (12:00 PM) Nadine Ohlinger, HR Director Pam Brosonski, Finance Director 2. Extraordinary (Exigent) Circumstances for Trustees Joining Electronically Mr. Baur explained that the Board must have a physical quorum present for the meeting following expiration of the Executive Order issued by Governor Desantis suspending the requirement. Due to the extraordinary circumstances created by the pandemic, the Board can allow additional Trustees to join the meeting electronically. No Trustees joined the meeting electronically. 3. Approval of Minutes: August 26, 2020 The Trustees reviewed the Minutes for the Quarterly Meeting on August 26, 2020. Ryan Moore made a motion to approve the August 26, 2020 minutes. The motion received a second from Judy Proli, approved by the Trustees 3-0. The Trustees also reviewed the Warrant dated November 20, 2020 for payment of invoices. Judy Proli made a motion to approve the Warrant dated November 20, 2020, to pay expenses. The motion received a second from Ryan Moore, approved by the Trustees 3-0. 4. Reports Quarterly Investment Report: Investment Consultant (Mitchell Brennan, Burgess Chambers & Assoc.) Mitchell Brennan reported that growth stocks outperformed value stocks significantly during the fiscal year ending September 30, 2020, but that a rotation back to value has since begun after October 1. For the calendar year to date, growth stocks gained 32% more than value stocks. Since October 1, however, value stocks gained 4.56% compared to a loss of -6.12% for growth stocks. News of possible COVID vaccines helped cyclical stocks and holdings such as restaurants, transportation, and hospitality most impacted by the pandemic. The Plan assets gained $1.3 million for the quarter for a net gain of 6.1% to rank in the top 10% of the public plan comparison universe. For the fiscal year the assets gained 11.4% net compared to 11.9% for the benchmark to rank in the top 8%. 6'- LE00N Retirement Plan & Trust for Firefighters of the City of Clermont C T Minutes Quarterly Meeting Choice of Champions November 20th, 2020 Mr. Brennan reported that the Plan currently has $1.7 million in cash due to recent deposit of contributions. He recommended allocation $300,000 to the Fidelity US Bond Index ETF, $300,000 to the Vanguard Short - Term Corporate Bond Index fund, $200,000 to the EuroPacific Growth Fund, $200.000 each to Fidelity Mid - Cap and Fidelity Small -Cap ETF Funds, and $100,000 to the Fidelity Large Cap Value Index Fund. Ryan Moore made a motion to accept the rebalance recommendation by the Investment Consultant. The motion received a second from Judd Lent, approved by the Trustees 3-0. The Plan had approximate total assets of $23,700,000 as of September 30, 2020, with additional gains of $2,025,000. Since October 1. The 9.5% gain for the trailing 5 years ranks in the top 8%. Mr. Brennan concluded that the Plan realized amazing results in a very volatile market year. Mr. Brennan then recommended an active manager to replace the large cap growth equity index allocation to help protect assets when markets go down. He reviewed results for 4 possible managers with concentrated portfolios consisting of 20 to 40 holdings. All the mangers operate separate accounts or mutual fund vehicles. Mr. Brennan reviewed historical performance and current top holdings for each manager compared to the index. The growth managers tend to overweight assets to technology issues. Polen in particular gained more than the benchmark with less risk or volatility. Mr. Brennan recommended that the Board hire Polen to manage a separate account for a 65bp fee, replacing the Fidelity large cap growth equity in the portfolio. Salem Trust, custodian for the Plan assets, currently charges a $5,000 flat fee. With the addition of an active manager, Mr. Brennan projects the fee to increase to 6 by with a $7,000 minimum or about $7,200 per year. Even with the fee increase to the custodian, the Board will save on management fees overall using a separate account instead of a mutual fund vehicle. Mr. Brennan also recommended the Board allow his office to determine the timing of the transition to the new account. Ryan Moore made a motion to approve the recommendation by the Investment Consultant to replace the Fidelity large cap growth equity allocation with a separate account managed by Polen. The motion received a second from Judy Proli, approved by the Trustees 3-0. Attorney Report: Bonni Jensen (Klausner, Kaufman, Jensen & Levinson) Ms. Jensen reported that her office requested additional medical records and also identified potential witnesses in the appeal by Lawrence Craford for a formal hearing to consider his duty disability pension application. Mr. Savelli, another duty disability pension application, also has his Independent Medical Exam (IME) scheduled. Ms. Jensen reviewed updates to the proposed ordinance restatement. The ordinance changes the definition of pay to limit overtime to 300 hours per year included in the definition of pension pay as of October 1, 2019. While members vest in pension benefits between 5 and 10 years of service, a member becomes fully vested in the Share Account with 5 years of service. After some consideration the City agreed to provisions in the ordinance to allow members with 5 years or more of service to use Share Account balances to purchase prior qualifying service credit. The City will also administer additional contributions through payroll for up to 5 years for purchases of service credit with an additional $0.98 administrative fee for each additional contribution processed through payroll. The actuary is in process to provide an impact 6'- LE00N Retirement Plan & Trust for Firefighters of the City of Clermont C T Minutes Quarterly Meeting Choice of Champions November 20th1 2020 statement for the proposed ordinance. Ms. Jensen intends to format the proposed ordinance to become part of Municode, in place of the prototype plan document previously adopted by Clermont through the Florida League of Cities. 5. Benefit Approvals Savelli Application: Refund of Buvback Contributions Mr. Baur provided an overview of the request by member John Savelli for a refund of additional contributions to the Plan used to purchase prior service credit. Mr. Savelli contributed $21,221 on August 3, 2011 to purchase 3 years of service credit. Ms. Jensen explained that the Plan provisions do not currently allow for a member to receive a refund of the additional contributions except at termination of employment in place of any other benefits available to the member through the Plan. If approved for a duty disability benefit, the additional service credit will not increase the amount that Mr. Savelli receives under the minimum benefit available. If not approved, however, Mr. Savelli will receive additional benefits for the years of service credit that he purchased. The minimum disability benefit still provides Mr. Savelli with a benefit of far greater value than his total contributions to the Plan. The Board considered the current Plan provisions, the precedent that the situation might create, and the obligation of the Board to all members of the Plan. Members to not have the option to take a refund of additional contributions to the Plan to purchase service credit. If allowed any member with a service credit purchase would presumably have the option to take a refund of the additional contributions for any reason at any time. The Plan provisions guarantee that Mr. Savelli will always receive a benefit at least equal to the total contributions he made to the Plan in the event that he does not withdraw or take a refund. The Trustees also noted that if approved Mr. Savelli would take an early distribution from the Plan subject to income tax and a possible 10% additional penalty on the amount. If Mr. Savelli does not qualify for a duty disability benefit, the additional contributions for the service purchase credit will provide greater benefits to Mr. Savelli. Mr. Savelli clarified that he wanted to obtain a refund of his contributions to purchase additional service credit regardless of the outcome of his application for a duty disability pension, believing that he should be entitled to receive the contributions back even in the situation that he still receives a greater benefit from the years purchased. Ms. Jensen advised the Board that the current Plan provisions do not allow for such a refund to a member. John Rhames made a motion to approve the request by Mr. Savelli for a refund of his contributions to purchase additional service credit. The motion received a second from Judy Proli. The motion failed to pass on a 2-2 roll call vote, with Trustees Judd Lent and Ryan Moore voting against the motion. Ryan Moore made a motion to table the request. The motion received a second from Judy Proli, approved by the Trustees on a 4-0 vote. The Board will revisit the request by Mr. Savelli on the next regular meeting agenda. 6'- LE00N Retirement Plan & Trust for Firefighters of the City of Clermont C T Minutes Quarterly Meeting Choice of Champions November 20th, 2020 6. Other Business The Board briefly discussed the Share Account allocation process. Mr. Baur reported that the census data originally provided by the City included employees not participating as members of the Plan. The allocation completed for 2019 must be revised as a result. Ms. Brosonski stated that she would provide an updated census to revise the 2019 allocation to members of the Chapter 175 premium tax receipts. The administrator has not yet received census, pay, and contribution data for the fiscal year ending September 30, 2020. 7. Public Comment No members of the public had any comment. There being no further business and the next meeting having been previously scheduled for February 24, 2021 at 11:00 AM, the Chair adjourned the meeting at 12:47 PM. Respectfully Submitted, Adam Watkins, Secretary