March 10, 2015
Recorded and Submitted by
Fire Headquarters
Barbara, Plan Administrator
3rd floor Small Conference Room
1980 NW 56 Avenue, Lauderhill, Fl.33313
Chairman Sean Henderson called the meeting to order at 4:36PM
Sean Henderson, Chairman
Michael Taussig, Vice Chairman
Karen Pottinger, Secretary
Ryan Gabner, Trustee
John Leicht, Trustee
Ron Cohen
MOTION to approve minutes by M. Taussig
SECONDED by K. Pottinger
1. Plan Administrator Report
The Investment Summary Report was presented for March. The Administrator expects a DROP entry application
dated May 1, 2015 from Paul Kalarovich. A request for a Disability Application was sent to Zachary Ninger and he
will be submitting it before April 1, 2015. The calculations for Optional Forms of Benefits for disability retirees Rick
Price and Karen Rantanen are being worked on by the Actuary. The Income Deduction Order for Mitchel Westcott
is ready and will be presented under New Business.
1. Discuss Income Deduction Order for Mitchel Westcott
MOTION by J. Leicht to approve
SECONDED by R. Gabner
The Attorney was asked if the documents are in order. The Attorney reminded the Board that when presented at
the February meeting, he didn’t think they could honor the Order as written. He contacted the Attorney for Mitchel
Westcott and told them what he felt was wrong with it. The Order is now accepted and should be followed. The
Attorney read the Court Order and confirmed there is not a COLA attached to Bambi Westcott’s share of the
2. Approve Valuation
The Attorney reminded the Board that Senate Bill 534 requires extra reporting. The State requires the Plan to do
this even though it doesn’t seem to be necessary. The State Law says that the extra reporting has to be done 60
days following the approval of the Valuation Report. Certain Regulations going out may clarify that reporting doesn’t
have to be done until 60 days after the Regulations are final. The Attorney hasn’t heard yet if the Regulations are
final or they have clarified it. The Administrator said there is not a rush on approval as of right now since they are
only required to do a Valuation every three years and this board does one annually. The Attorney recommends
holding off approval of the Valuation for now.
MOTION to table by M. Taussig
SECONDED by J. Leicht
3. Approve Pension Office Renewal Lease
MOTION by M. Taussig to approve
SECONDED by K. Pottinger
4. Approve Warrant
MOTION by R. Gabner to approve the warrant in the amount of $28,365.40
SECONDED by K. Pottinger
The Attorney was not at the Special meeting where Investco gave their presentation and mentioned they had a side
letter with Clearwater Police. Ron and Brent were both disappointed to find out Investco did not have a side letter
with Clearwater. Investco said they will agree to certain changes in the participation agreement if the plan’s legal
counsel will propose the changes. They will do this and report at the next meeting.
HB 1279 was introduced in the State legislature by Representative Janet Adkins, Republican in District 11, Nassau
County. In the Bill, it will require that the Actuary report using the Mortality methodology used in the most recent
Actuarial Valuation for FRS. Having to use the FRS Mortality Table is a concern. He doesn’t know what effect that
will have on the Plan’s costs. The people who make these determinations do not have a fiduciary responsibility with
the investment assumptions. They have written a lot of letters to plans that are under 50% funded recently. We
haven’t gotten a letter telling us that ours in not right. They also want to remove the 5th member chosen by the other
4 members and will require that 3 trustees be legal residents of the municipality chosen by the municipality and
they cannot be a member, retiree, beneficiary, or payee of the pension plan. Also, the Bill will require that the board
provide a detailed accounting report of the expenses for each Fiscal Year to the Sponsor and to the Department of
Management Services. Will require that the Administrator have a Bachelor’s Degree in Finance or is a licensed
CPA, have at least three years of Retirement Fund Management experience, and be approved by majority plus one
of the Plan Sponsor. Will remove the requirement that Premium Tax money be used for extra benefits and require
that the money be simply used for retirement benefits. There’s no minimum benefit provision. It removes the
definition of premium tax and extra benefits. For DROP effective July 1, 2015 and for Collective Bargaining
Agreements entered into after that date it requires the interest for the DROP account may not accrue at an annual
rate more than that provided by the FRS which is currently 1.3%. The COLA rate may not exceed the annual rate
established by the CPI for urban consumers and in no event can it ever exceed 4%. There can’t be bonus based
upon earnings of the fund if there’s an Actuarial unfunded liability. If the funded ratio is less than 55% the board has
to request that the officer of the audit in general conduct an audit of the plan’s management accounting practices
and investments. The findings are reported to the leaders of the House Senate of the Municipality. All costs will be
borne by the fund. If it’s less than 75% the board has to require that an internal audit be conducted every three
years and the results must be provided to the Department of Management Services.
Having read parts of the recently filed Bill, if it passes in this form the attorney would think a lot of Cities would
begin to drop out of Chapter 175 and 185. This House Bill, to a large extent, takes away employee control and to
some extent participation in the running of the Board. It takes away control of the plan and gives the control to the
City. It takes away the fifth board member who is to be a neutral. After more discussion, the board will wait to hear
what transpires. The attorney will follow this over the next two months and keep the board informed.
Jonathan Monteagudo asked the board to give him an understanding about the options in contributing towards the
Tier Two Multiplier Purchase. In the case of contributing payroll deductions there were two ways of doing this. One
was Pre-taxed and one was Post-taxed. The only way contributions could be pre-taxed were upon date of hire. This
election falls under an IRS ruling that required the member to elect to contribute prior to having received his first
pay. After many meetings, several consults with a tax attorney, and discussions with the Union and City, it was not
an option that would work. It was determined that the best way to take advantage of pre-taxed money is to put it in
a 457 plan, or another acceptable option, and then transfer it to the pension fund as pre-taxed contributions
towards the multiplier purchase. The Board cannot give individual tax advice. The other issue with the pre-taxed
payroll deduction option was that the member could not stop the contributions at any time. Contributions have to be
made throughout the career, whether they have contributed enough to purchase the multiplier or not. If the member
had a hardship and needed to stop contributing to the multiplier purchase they cannot not. Electing to contribute
towards the multiplier purchase through payroll deduction is only a post-taxed option. After some discussion, the
Chairman recommended that Mr. Monteagudo put further questions in writing, send it to the Administrator and she
can forward them to the Actuary for further discussion at the May meeting.
The administrator asked the Board to sign the auditor’s representation letter. This will release the Financial
Reports. The Attorney did review it and approve it. The Chairman signed the letter. The Administrator will forward it
to GSK.
MOTION to adjourn at 5:45 PM.
Respectfully submitted by Barbara White