MINUTES OF THE MEETING OF THE GENERAL EMPLOYEES PENSION BOARD, MAY 16, 2011 Present: Chair Mike Taylor, Vice-chair Cheri Potts (arrived at 8:35 a.m.), Treasurer Christopher Lyons, and Trustees Barry Keeler, Susan Kosko, and Gretchen Schneider Absent: Secretary Pamela Nadalini Others Present: Attorney Scott Christiansen, Mr. Charles Hofer of Lord Abbett, Mr. Charlie Mulfinger of Graystone Consulting, Pension Plans Administrator Benita Saldutti, Pension Analyst Gail Loeffler, and Staff Member Diane Torres CALL TO ORDER Chair Taylor called the meeting to order at 8:30 a.m. APPROVAL OF THE MINUTES OF APRIL 18,2011 By consensus of the Board, the minutes of April 18, 2011, were approved. APPROVAL: DROP REQUEST OF JEAN BERKEY AND ROSCOE GILL, NORMAL RETIREMENT REQUEST OF SUSAN CAMPBELL Ms. Saldutti stated that Jean Berkey, 65 years of age, with 23 years of service is requesting DROP retirement with the normal lifetime option, effective June 1, 2011. Ms. Saldutti stated that Roscoe Gill, 59 years, 5 months of age, with 30 years of serviçe is requesting DROP retirement with 100% pop up option, effective September 1, 2011. Ms. Saldutti stated that Susan Campbell, 66 years, 4 months of age, with 10 years of service is requesting normal retirement with the lifetime option, effective June 1, 2011. On a motion of Trustee Kosko and a second of Treasurer Lyons, it was moved to approve the DROP retirement requests of Jean Berkey and Roscoe Gill and the normal retirement request of Susan Campbell. Motion passed unanimously. INVESTMENT REVIEW - LORD ABBETT Mr. Hofer gave an overview of the firm, stating Robert Fetch, who was head of the firm's domestic equity portfolio management, is now leading the large-cap investment team. Mr. Hofer presented the portfolio results of the period ending March 31, 2011. Mr. Hofer stated that the one-year result was 14.43% VS. the benchmark at 15.15%. He continued that the under performance was a result of the performance for the quarter ending March 31, 2011 which was May 16, 2011 1 5.23% VS. the benchmark at 6.46%. He continued that the three-year and since inception periods exceeded the benchmarks resulting in the overall portfolio being higher than the benchmark. INVESTMENT REVIEW - GRAYSTONE CONSULTING Mr. Mulfinger stated that the economy continues to expand in the recovery phase with two consecutive quarters with an increase of the gross domestic product (GDP). He continued that the lead indicators show positive growth, He continued that the S&P 500 Index is up 5.9%. Mr. Mulfinger presented the portfolio results of the quarter ending March 31, 2011. Mr. Mulfinger stated that the portfolio balance at the end of the first quarter is $125,491,193 resulting in a gain of$6,354,764 net of fees. Chair Taylor suggested investing in an alternative strategy such as real estate. Attorney Christiansen stated that the investment parameters in the Pension Code would have to be amended by the City Commission to allow a real estate trust. After a brief discussion of the assumed rate of investment return, Ms. Saldutti stated that the Board will receive input from the actuary in August at which time the Board can consider whether to change the assumption rate for the next actuarial valuation. REVIEW OF FLORIDA SUNSHINE LAW Attorney Christiansen distributed a three-page overview of the Florida Sunshine Law and stated that the Trustees should review the information. He summarized that the Trustees are subject to the Sunshine Law, which means that all communication on pension issues, either verbal or written, must be done openly. Ms. Saldutti stated that the ManaSota League of Cities will be hosting a training session concerning Open Government in the State of Florida on June 1 and 2, 2011, at 9 a.m., in the Commission Chambers. Pension Plans Administrator Saldutti stated that Trustees should be extremely cautious about accepting gifts sO that there is no appearance ofviolating the law. Treasurer Lyons requested that additional information concerning the $25 gift limit be provided at a future meeting. OTHER MATTERS Pension Update Attorney Christiansen questioned the status of the ordinances establishing the Detined Contribution Plan for new and existing employees. Ms. Saldutti stated that the Teamsters rejected the City's proposal. She continued that a new Commission was sworn-in May 13, 2011, therefore, the direction ofthe new Commission concerning pensions is not known at this time. May 16, 2011 2 Legislative Update Attorney Christiansen stated that the State Legislature passed HB 303 which is applicable to all police, fire, and general employees' pension plans throughout the State and limits the definition of compensation or salary which can be included in the pension plan. He continued that the City may not include more than 300 hours of overtime annually nor can the City include lump sum payments of sick and vacation time. He continued that further clarification concerning lump sum payments will be sought from the Division of Retirement. Terms of Trustees Ms. Saldutti stated that the term of Trustee Potts will expire soon. She continued that nomination forms have been distributed to eligible employees. She continued that the deadline to submit the nomination forms is May 18, 2011. Annual Financial Disclosure Attorney Christiansen stated that members of the General Employees' Pension Board will be receiving the annual Financial Disclosure form in the near future. He continued that the forms are due July 1, 2011. Pension Plan Chair Taylor stated that he was disappointed that the City's proposal to the Teamsters did not give all Plan members the option to remain in the Defined Benefit (DB) plan and hopes that the City Commission will allow all current employees a choice as they continue to seek a solution with Teamsters. He continued that people who accepted employment with the City with an expectation of being part of the Pension Plan should be regarded the same as people who have been with the City for more than 10 years. Next Meeting The next regular meeting will be on June 20, 2011, at 8:30 a.m. in the City Commission Chambers. ADJOURN The meeting was adjourned at 10:09 a.m. Michael Taylor, Chair Pamela Nadalini, Secretary May 16, 2011 3