Loading...
Minutes 08-23-23 Firefighter Quarterly Meeting+ Retirement Plan & Trust for Firefighters of the City of Clermont CfER �Nfi DRAFT Minutes Quarter) Meeting Chaise of Champions DRAFT g August 23, 2023 1. Chair Judd Lent called a Quarterly Meeting of the Firefighters Retirement Plan Board of Trustees to order at 9:00 AM on August 23, 2023, in Council Chambers at the Clermont City Hall. Those persons present included: TRUSTEES OTHERS Judd Lent, Chair Scott Baur & Kyle Tintle, Administrator (Resource Centers) Ryan Moore, Secretary Sean Sendra, Attorney (KKJL) Adam Watkins, Trustee Mitchel Brennan & Larry Cole, Investment Consultant, (BCA) Ariel Guerrero, Trustee Debbie Kocsis, Custodian (Salem Trust) Katherine Falcon, Trustee Electronically: Bonni Jensen, Attorney (KKJL) Nadine Ohlinger (City of Clermont) Chuck Carr, Auditor (Saltmarsh) 2. Extraordinary (Exigent) Circumstances for Trustees Joining Electronically No Trustees joining electronically. 3. Approval of Minutes: The Trustees reviewed the Quarterly Board Meeting Minutes dated May 24, 2023. Ryan Moore made a motion to approve the Quarterly Board Meeting Minutes dated May 24, 2023. The motion received a second from Ariel Guerrero, approved by the Trustees 5-0. 4. Reports: Quarterly Investment Report: Investment Consultant, (Mitchell Brennan & Larry Cole BCA) Mr. Cole and Mitchell Brennan, Investment Consultant (Burgess Chambers Associates) Mr. Cole reported on a very concentrated market. The assets had gains but lagged the benchmark fiscal year to date. Mr. Brennan explained the top 10 companies in the market account for many of the gains. Stocks have become expensive by historical standards. Those top companies account for about one third of the index but only twenty percent of the earnings. They also account for seventy-five percent of the market gains. Growth outperformed value for the current fiscal year. Mr. Brennan compared the plans equites to the Russell 3000 equity benchmark. Large cap stocks also outperformed small and mid -cap stocks recently, although historically the opposite is true. Mr. Cole reported the equites had a strong quarter. He reviewed the recent market performance for both stocks and bonds. Assets are currently overweight equites in the small and mid -cap space. The Plan already redeemed part of the real estate allocation. The assets gained 3% for the June 30t" quarter compared to 3.6% for the bench, and 11.3% fiscal year to date compared to 13.3% for the benchmark to finish June 30th with $30,370,301 in total assets. Polen continues to perform under the Russell 1000 Growth benchmark primarily due to Apple and Microsoft which now account for 30% of the index. Mr. Cole recommends diversifying some of the Polen allocations to the benchmark index. Timing for such a + Retirement Plan & Trust for Firefighters of the City of Clermont CfER �Nfi DRAFT Minutes Quarter) Meeting Chaise of Champions DRAFT g August 23, 2023 move, however, may or may not help. He also recommends reducing small and mid -cap slightly to the large -cap index. Mr. Cole continued to review individual managers' results in further detail. He believes inflation will continue to present problems and interest rates will continue to increase. The 5-year 6.9% average annual gain ranks in the top 36%. Burgess Chambers & Associates recommends selling $1,000,000 of Polen, $200,000 of Fidelity Mid -Cap, and $100,000 of Fidelity Small Cap, and purchase $1,150,000 of Fidelity Large Cap Growth (FSPGX) and $150,000 of Fidelity Large Cap Value (FLCOX). Mr. Cole stressed incremental moves in the portfolio. Adam Watkins made a motion, based on the advice of the investment monitor, to approve the rebalance recommendations. The motion received a second from Ryan Moore, approved by the Trustees 5-0. Mr. Cole provided an updated Investment Policy Statement to comply with the requirements of House Bill 3 (HB3). The bill requires the Board to invest plan assets based solely on pecuniary factors rather than any Environmental, Social, and Governance (ESG) considerations. He also adjusted the target range for the real estate allocation. The Board will have new reporting requirements by December 15th to comply with H B3. Ryan Moore made a motion to approve the updated Investment Policy Statement. The motion received a second from Ariel Guerrero approved by the Trustees 5-0. Actuary Report: Chuck Carr (Southern Actuarial Service) Mr. Carr presented the October 1, 2022, Actuarial Valuation report which includes the new ordinance 2023-003. He does not recommend any assumption changes, but he adjusted the timing of the city contribution. This report will change the city contribution for the fiscal year 2024 (FY24) to the projection method. In the transition year the city will make the same contribution this year as last year. Judd Lent noted an error in the Summary of Plan provisions. The multiplier reduces to 2% after 22 years of service. The report will need to be reissued. The city contribution will increase due to the negative investment results. After the Chapter 175 premium tax receipts the city contribution from 10.04% to 33.7% similar to historical contribution rates. The city contributions decreased for only 2 years due to strong investment results in 2021. Mr. Carr can also implement an asset smoothing for up to 5 years which this plan previously did not use. Gains in the current year, however, should help with contributions in the following year. The funded ratio changed to 107.84%, still very strong. The Board with defer approval of the valuation report to the next meeting. Adam Watkins made a motion to table the valuation report until the next meeting. The motion received a second from Katherine Falcon, approved by the Trustees 5-0. Ms. Jensen addressed the anticipated change for workers compensation. Mr. Carr stated the change will have no actuarial impact because the current method of determining the city contributions does not assume any such leave will happen. Right now, the City has small incremental experience gains when a + Retirement Plan & Trust for Firefighters of the City of Clermont CfER �Nfi DRAFT Minutes Quarter) Meeting Chaise of Champions DRAFT g August 23, 2023 member does have a worker's injury. If someone does qualify for a disability pension the person will not receive credit for workers compensation settlement following the separation from service. The Board will not revisit any past benefits. The city will not send additional contributions for past compensation not included. Ms. Jensen explained there is no need for Mr. Carr to revise the valuation report error, noting it was a typo. Adam Watkins made a motion to approve the Actuarial Valuation subject to the correction of the typographical error. Ryan Moore seconded the motion. The motion was approved by the Trustees, 5-0. Ms. Jensen advised the Board they need to set the expected rate of return. Ryan Moore made a motion based on the advice of the investment consultant, the Board expects a 7% return for the next year, next several years, and the long term thereafter. Adam Watkins seconded the motion. The motion was approved by the Trustees, 5-0. Custodian: Debbie Kocsis (Salem Trust) Ms. Kocsis announced the merger of the Georgia based holding and parent company with Argent Financial Group based in Ruston, LA. The merger is pending approval by the regulatory authorities. There will be no accounting software changes or conversions and the name will be Argent doing business as Salem Trust Company. Ms. Kocsis presented the online portal for retired members to access information and make updates. Retirees could potentially make address and deposit account changes online. Salem does not prenote account changes. The online access comes with no additional change. Retirees can opt in or out of the program. Currently 17% of retirees have activated their online access. Judd Lent favors access except for deposit accounts. The Board will begin with view only access. Salem will use the Resource Centers address and deposit change forms for retirees. Ryan Moore made a motion to approve the pension portal for viewing access only. Ariel Guerrero seconded the motion. The motion was approved by the Trustees, 5-0. Attorney Report: Bonni Jensen (Klausner, Kaufman, Jensen & Levinson) Ms. Jensen introduced Sean Sendra; he has been an attorney for 14 years who joined her firm earlier this year. She addressed the Workers Compensation amendment. Ms. Jensen obtained the current bargaining agreement and the City's policy that indicates workers' compensation should be included in pension compensation for both salary and credited service. She would use Family and Medical Leave Act (FMLA) time purchases provisions to allow for members contributions. Ms. Ohlinger clarified FMLA conversation, for permissible time for payments from workers compensation, sick and vacation time, and FMLA. Ms. Jensen advised that even though the City pays amounts to several members, will have to self - contribute on amounts (66%) received through workers' compensation. The City will hold enough out of the 1/3 compensation to cover the full required contribution amounts. Members can buy past workers' compensation time, giving those members the opportunity to buy back that time. + Retirement Plan & Trust for Firefighters of the City of Clermont CfER �Nfi DRAFT Minutes Quarter) Meeting Chaise of Champions DRAFT g August 23, 2023 Ryan Moore made a motion to table the consideration of the proposed ordinance to the next meeting. The motion received a second from Judd Lent, approved by the Trustees 5-0. Ms. Jensen briefly addressed a situation where a man collected social security for a deceased parent for over 30 years. Her firm also updated the IRS special tax notice. Her firm proposed a fee increase from $300 to $350 per hour. The last time an increase was requested was in 2019. Ryan Moore made a motion to approve the proposed fee increase as requested for the hourly rate for the firm of Klausner, Kaufman, Jensen & Levinson. Adam Watkins seconded the motion. The motion was approved by the Trustees, 5-0. Administrator Report: Scott Baur (Resource Centers) Mr. Baur gave an update on the Auditor; he presented the scope of service and fee request in the audit engagement letter for Saltmarsh. Ariel Guerro made a motion to approve the audit engagement letter. Katherine Falcon seconded the motion. The motion was approved by the Trustees, 5-0. Mr. Baur reported that the 2022 Premium Tax Distribution would be $394,387.77 for Clermont Firefighters. He presented the dates for the FPPTA fall school and the 52d Annual Department of Management Services Conference. 5. Plan Financials Mr. Baur presented the Board with the Interim Financial Statement dated June 30, 2023, for informational purposes. The interim financial statements were received and will be filed. He presented the Warrant dated August 23, 2023, for review. Ryan Moore made a motion to approve the Warrant dated August 23, 2023. Katherine Falcon seconded the motion. The motion was approved by the Trustees, 5-0. 6. Other Business There was no other business. 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 November 23, 2023, at 11:00 AM will be moved to November 29, 2023, due to the Thanksgiving Holiday. Judd Lent adjourned the meeting at 11:15 AM. Respectfully Submitted, Ryan Moore, Secretary i CLER ONT Choice of Champions Retirement Plan & Trust for Firefighters of the City of Clermont DRAFT Minutes Quarterly Meeting August 23, 2023