MINUTES OF THE REGULAR MEETING OF THE FIREFIGHTERS PENSION BOARD OF JULY 25, 2012 Present: Chair T. J. Broom, Secrelary/Treasurer Pamela Nadalini, and Trustees Shella Roberson and Scott Snow Absent: Vice-Chair Mike Hartley Others Present: Attorney Robert Sugarman, Charlie Mulfinger and Scott Owens, Graystone Consulting, Pension Plans Administrators Benita Saldutti and Wendy Clutter, Pension Analyst Gail Loeffler and Commission Reporter Veda Mahadi CALL THE MEETING TO ORDER Chair Broom called the meeting to order at 9:05 a.m. APPROVAL OF THE MINUTES On a motion of Trustee Snow and a second by Trustee Roberson, it was moved to approve the minutes of the June 20, 2012. Motion passed unanimously. INVESTMENT REVIEW Mr. Mulfinger gave an overview of the investment markets and the economy for the past quarter, He distributed hand-outs entitled, "Summary of Relevant Facts AO June 2012" and stated that the market value of the porifolio on June 30, 2012, was $104 million with a $2,712,418 loss for the quarter. He reviewed the performance of each manager and stated that a few of the managers are not performing well and will monitor. Trustee Roberson asked at what point recommendations are made to terminate managers if performance does not improve, Mr. Mulfinger stated that the norm is 3 to 5 years. Discussion ensued about 3 years being too long before a manager change is made, sharing board concerns with managers and the possibility of managers being replaced. Altorney Robert Sugarman requested that Mr. Mulfinger document what is being sent to the managers and to follow-up with the board at the August 22, 2012, meeting. Mr. Mulfinger stated that the Pension Fund is up 15.02% for the fiscal year through the end of June 2012. Mr. Mulfinger Introduced Scott Owens, Financial Advisor, stating that he has been in the institutional business for over. 20-years and has completed his second level of Chartered Financial Analyst (CFA), and- is currently working on the third level. DISGUSSION: ASSUMED RATE OF RETURN Attorney Sugarman thanked Secrelary/Treasurer Nadalini and the City for the open-dlalogue opportunity. He stated that at the Cily Commission Budget Workshop of July 18, 2012, mention was made that the Firefighters' Plan has a lower funded ratio than Police and General Employees', but no mention was made that the Firefighters' Plan has been closed for 16 years and closed plans operate very differently than open plans, He continued that the Firefighters' Plan is a mature closed plan and will eventually moye to a retiree only plan; that a closed plan is conservative and less aggressive. July 25, 2012 Page 1 Attorney Sugarman stated he had no objections to considering the Commission comments and recommended that County Officials, active employees and retirees should be able to participate in the dialogue, along with the actuary, Brad Armstrong. Secretary/Treasurer Nadalini clarified that the meeting will not be a joint meeting or workshop between the City/Counly Commission and the Firefighters' Board; that the meeting is intended for pension professionals to educate the Commission and public on the Pension Boards' behalf; that the discussion will concern all the pension plans. She çontinued that it will be a workshop and no action will be taken; the meeting will be opened to the public. The date and time of the meeting has not yet been scheduled. Mr. Mulfinger stated that the focus of the meeting should not be on what occurred ten-years ago or trying to defend the returns; that an Asset Allocation Study should be presented/explained in order to educate. HB 401 Re: DESIGNATION OF BENEFICIARY Attorney Sugarman stated that HB 401 provides that if a spouse is designated as a beneficiary for pensions, IRAs, Life Insurance, etc, that the designation becomes invalid upon divorce, including those who signed before the law went into effect on July 1, 2012. Attorney Sugarman further stated that the only exceptions where the law would not apply are: 1. the member did not name a beneficlary as a spouse; or 2. a divorce decree requires the ex-spouse to remain as a Joint Annuly/Survivor or Beneficlary. Discussions ensued about updating all members' beneficiary forms. Attorney Sugarman stated that his office will draft al letter for distribution to plan members. Ms. Saldutti stated that the plan provides that the spouse of at the time of death is the joint annuitant, unless someone else has been chosen; that a majority of retired members did not have the choice of another option; that if they are not married, the benefit stops at death. OTHER MATTERS Secretary/Treasurer Nadalini reminded members to file their Form 1, Financial Disclosure form to avoid costly fines. Attorney Sugarman stated that the form shouid be filed in person with the County Supervisor of Elections within the residing county, or by certified mail return receipt requested and saved as a reçord for at least 5-years, ADJOURN The meeting adjourned at 10:30 a. m. Other information The next regular meeting of the Firetighters' Pension Board, August 22, 2012, at 9:00 a.m. in the City Commission Chambers. Chair Broom Secrelary/Treasurer Nadalini July 25, 2012 Page 2