MINUTES OF THE FEBRUARY 26, 2016 CITY OF SARASOTA GENERAL EMPLOYEES PENSION PLAN BOARD OF TRUSTEES SPECIAL MEETING Present: Chair Gretchen Schneider, Vice Chair Barry Keeler, Secretary Pamela Nadalini, Treasurer John Lege, and Trustees Ryan Chapdelain, Bonnie Wagner, and Kari McVaugh Others: Attorney Scott Christiansen, Pension Plans Administrator Harry Ramphal, Senior Pension Analyst Anthony Ferrer, and Pension Specialist Chinyere Deehan Absent: None 1. CALL THE MEETING TO ORDER: Chair Gretchen Schneider called the meeting to order at 2:00 p.m. 2. PLEDGE OF CIVILITY: Chair Schneider read into the record a memorandum from Mayor Willie Charles Shaw, dated February 13, 2015, entitled "City Commission and Advisory Board Meeting Protocols and Pledge of Civility." CHANGE TO THE ORDER OF THE DAY MEMORANDUM Secretary Nadalini sought Board consensus to add Agenda Item 5, Item No.1, Presentation and Discussion Re: Pension Benefit and Plans Request. Chair Schneider noted Board consensus to the Change to the Order of the Day. 3. PUBLIC INPUT: None 4. APPROVAL OF RETIREMENT REQUESTS: 4.1. Approval Re: Lump Sum Distribution Request of Andrew Goenne Pension Plans Administrator Ramphal stated that Andrew Goenne requested a vested lump sum distribution. Mr. Goenne had 10.62 years of service. A motion was made by Secretary Nadalini, seconded by Vice Chair Keeler to approve the lump sum distribution request. In response to Chair Schneider asking if there were any questions, Treasurer Lege asked Pension Plans Administrator Ramphal to explain the calculations made in order to determine the lump sum distribution and which section of the Code was used to determine the distribution. Pension Plans Administrator Ramphal provided an explanation regarding how the lump sum distribution payable to Mr. Goenne was calculated. Treasurer Lege stated that he calculated a higher figure for the lump sum distribution than what was calculated by the Pension Administration Division. Secretary Nadalini asked Attorney Christiansen if it would be appropriate to amend the motion to request that Pension Plans Administrator Ramphal reconfirm that the calculations regarding Mr. Goenne's lump sum distribution are correct. Attorney Christiansen advised that the lower figure for the lump sum distribution could be approved by the Board and after Pension Plans Administrator Ramphal reviews the calculations, a potentially higher supplemental payment could be made to Mr. Goenne. Secretary Nadalini amended her motion to approve the presented figure for distribution Book 1 Page 6 02/26/16 2:00 P.M. Book 1 Page 7 02/26/16 2:00 P.M. to Mr. Goenne and Vice Chair Keeler agreed with the amendment. Secretary Nadalini asked Chair Schneider if the Board would agree to briefly postpone discussion of Mr. Goenne's lump sum distribution to allow the Pension Plans Administrator Ramphal to reconfirm that the calculations were correct while the Board proceeds with the other agenda items. Chair Schneider agreed and Secretary Nadalini withdrew the motion from the floor and Vice Chair Keeler as seconder also agreed. After reviewing the calculations, Pension Plans Administrator Ramphal returned to the dais and described in detail how Pension Administration calculated the amount payable to Mr. Goenne. Vice Chair Keeler requested that in the future he would like to see the calculations for lump sum distributions and retirement requests presented in the same manner that Pension Plans Administrator Ramphal submitted it to the Board at this instance. Pension Plans Administrator Ramphal agreed to do this going forward. On a motion of Secretary Nadalini, and a second of Vice Chair Keeler, it was moved to approve the lump sum distribution request of Andrew Goenne. Motion passed unanimously (7-0). Chair Schneider requested that the Board members who were absent from the General Employees' Pension Plan Board of Trustees Regular meeting dated February 22, 2016 be excused from that meeting. Discussion ensued regarding the meeting time. On a motion of Trustee Chapdelain, and a second by Treasurer Lege, it was moved to approve excusing any Trustee from their absence from the General Employees' Pension Plan Board of Trustees Regular meeting dated February 22, 2016. Motion passed unanimously (7-0). Chair Schneider received voicemail messages from Andrew Goenne which she perceived as a threat. Discussion ensued regarding the voicemail messages from Mr. Goenne. 4.2. Approval Re: DROP Retirement Request of Shederick Stephens Pension Plans Administrator Ramphal stated that Shederick Stephens requested to enter the DROP effective February 2016. Pension Plans Administrator Ramphal stated that Mr. Stephens is 65 years of age and has 18.63 years of service. Mr. Stephens selected the Lifetime Option. On a motion of Treasurer Lege, and a second of Secretary Nadalini, it was moved to approve the DROP retirement request of Shederick Stephens. Motion passed unanimously (7-0). 5. NEW BUSINESS: 5.1. Presentation and Discussion Re: Pension Benefit and Plans Request Alan Woodle, retired Sarasota Police Officer and member of the benefit focus group, Ernest Cave, retired City of Sarasota Firefighter and President of the Retired Firefighters' Association, and Janice Docking, retired General Employee and member on the Board of Sarasota Municipal Retired Employees' Association, came before the Board to present their request for tax deductions based on their health insurance being withdrawn from their pension check. Mr. Cave advised that if the retirees' health insurance is paid without being withdrawn from the retirees' pension check, they are not eligible for a tax deduction offered under the Pension Preservation Act of 2007. He stated that with the changes that the City of Sarasota has made regarding the health insurance plan, which includes the implementation of a stipend option for post- Medicare retirees, City retirees receive a stipend from the City of Sarasota instead of the City of Sarasota's health insurance and this option also extends to retired general employees. Mr. Cave stated that this becomes an issue when the City of Sarasota pays out the stipend to the retirees and the retirees pay for their insurance, as these health insurance premiums are no longer tax deductible for retired firefighters and retired police officers. Mr. Cave stated that he would like the Police Officers' and Firefighters' Pension Boards to approve a procedure where the cost for the health insurance would come out of the retirees' pension benefit and be paid directly to the insurance company, which would maintain the tax deduction. Mr. Cave advised that the retired general employees are not eligible for the tax deduction under the Pension Preservation Act of 2007. He further advised that if the retired general employee opts for their health insurance to be paid out of their pension benefit, it would be more convenient for General Employee Plan members to align with what the retired police officers and firefighters wish to have approved. Mr. Cave stated that there would not need to be a change in the pension ordinance to accommodate their request. Discussion ensued regarding the health insurance payment procedure. In response to a question by Treasurer Lege asking what is needed from the Board, Mr. Whitehead stated that if they go before the City Commission with their request, they want to be able to advise them that the all three Boards support the request as a benefit to the retirees. Secretary Nadalini advised that Pension Administration is exploring if this request can be accommodated with the Pension Administration third-party payroll provider, ADP. She further stated that this request may require that the current platform used to administer the payroll be changed to some degree, which may also require a cost analysis. Secretary Nadalini stated that based on the Firefighters' Board of Trustees Pension Plan meeting, where this request was also discussed, it is important to note that the current fire code specifically indicates that the Plan and its Board of Trustees shall not incur any liability. Secretary Nadalini reiterated that the fire code states that any administrative expenses incurred as a result of such withholding shall be borne by the retiree. She further advised that the fire code does allow for the Board to explore the possibility of such deductions though the retirees will be solely responsible for any costs incurred, and that the Pension Administration will have to ensure that the Plan does not incur any liability or expense. In response to a question by Trustee Wagner regarding who will be held responsible to make the Pension Administration aware of changes in the cost of the health insurance, Mr. Cave stated that the responsibility would lie with the retiree to make sure the Pension Administration is aware of any changes in the cost of the health insurance. Secretary Nadalini added that the Pension Administration is not in the insurance business and it would not be advantageous for the Pension Administration to be involved beyond what Code provides for and more importantly, the Plan must not incur any liability in accommodating this request. Attorney Christiansen passed out the current Plan Provisions to the Board. He stated that in regards to retired police officers and firefighters, it makes sense for the health insurance payment to be deducted from their pension benefit and paid directly to the healthcare provider, as this is the only way to ensure that the retiree receives a tax deduction. Attorney Christiansen advised that the same tax deduction does not apply to retired general employees because it is only available to retired public safety employees. He stated that the benefit for the general employees is that instead of writing a check and mailing it to the health insurance company, it is automatically deducted from their monthly pension benefit. Attorney Christiansen advised that as per the provisions, the only thing that is authorized by the Plan are payments made to the City of Sarasota for benefits that are provided by the City of Sarasota. He stated that currently the Board does not have any authority to make the health insurance deductions and send them to the healthcare insurer, there would have to be a change in the ordinance to allow employees to use payroll deductions to pay bills. In response to Trustee Keeler's question regarding who would be responsible for administering and processing the payroll deductions and who would it impact, Mr. Cave responded that it is two groups of retirees that it would impact: retirees who are Medicare eligible, choose the stipend plan, and no Book 1 Page 8 02/26/16 2:00 P.M. Book 1 Page 9 02/26/16 2:00 P.M. longer have their insurance through the City of Sarasota or those retirees who choose to move their dependents off of the City of Sarasota's health insurance whether or not they are Medicare eligible. Secretary Nadalini stated that the Pension Administration is exploring with ADP the feasibility of modifying the current platform and is waiting to obtain an estimate from ADP. She advised that the Pension Administration will also factor in the administrative costs of this process and once that information is received, these results will be shared with the Board. 6. OTHER MATTERS: 7. ADJOURN. Chair Schneider adjourned the General Employees Pensions Board of Trustees Regular meeting at 3:42 p.m. An Goal N Chair Gretchen Schneider Secretary Pamela M. Nadalini