Book 1 Page 27 07/18/16 8:30 A.M. MINUTES OF THE JULY 18, 2016 CITY OF SARASOTA GENERAL EMPLOYEES' PENSION PLAN BOARD OF TRUSTEES REGULAR MEETING Present: Chair Barry Keeler, Vice Chair Ryan Chapdelain, Secretary Pamela Nadalini, Treasurer John Lege, and Trustees Gretchen Schneider and Bonnie Wagner Others: Attorney Scott Christiansen, Pension Plans Administrator Harry Ramphal, Senior Pension Analyst Anthony Ferrer, and Pension Specialist Chinyere Deehan Absent: Trustee Kari McVaugh 1. CALL THE MEETING TO ORDER: Chair Keeler called the meeting to order at 8:31 a.m. 2. PLEDGE OF CIVILITY: Chair Keeler 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." 3. ROLL CALL: Secretary Nadalini called the roll and stated that there is a quorum for the meeting. Trustee Schneider stated that Trustee McVaugh requested to be excused from this meeting as she is recovering from surgery. Chair Keeler stated to the Board that he will be absent from the August 15, 2016 General Employees' Pension Plan Board of Trustees Regular Meeting. A motion was made by Treasurer Lege, seconded by Vice Chair Chapdelain to approve the excused absence for Trustee McVaugh on July 18, 2016. Motion carried unanimously (6-0). 4. PUBLIC INPUT: None 5. APPROVAL OF MINUTES: 5.1. Approval Re: Minutes of the June 20, 2016 General Employees' Pension Plan Board of Trustees Regular Meeting Vice Chair Chapdelain stated that the minutes of the June 20, 2016 General Employees' Pension Plan Board of Trustees Regular Meeting should be corrected to reflect that the plan's actuary, Pete Strong, stated that Pension Plans Administrator Ramphal misinterpreted the code in regards to Andrew Goenne's lump sum calculation. Secretary Nadalini stated that the minutes of the June 20, 2016 General Employees' Pension Plan Board of Trustees Regular Meeting would be reviewed and corrected if necessary, to be approved at the next meeting. 6. BOARD APPOINTMENTS: 6.1. Approval Re: Election Results for Seat GP2 of the General Employees' Pension Board of Trustees Secretary Nadalini stated that the election for seat GP2 was conducted and one petition was received from Member Chapdelain. A motion was made by Trustee Schneider, seconded by Treasurer Lege, to approve the reappointment of Ryan Chapdelain for seat GP2. Motion carried unanimously (6-0). 7. INVESTMENT PERFORMANCE REVIEW: 7.1. Presentation and Discussion Re: Invesco Fixed Income Portfolio Claire Potter, Senior Associate Director of US Institutional Sales & Services, Invesco and Marvin Flewellen, Sr. Client Portfolio Manager, Invesco came before the Board to present the investment portfolio for the pension fund, and gave a brief overview of the firm's assets and stated that a third of their business comes from institutional clients such as the General Employees' Pension Fund. Mr. Flewellen stated that the returns have been stronger than expected; that the rate of return for the quarter ending June 30, 2016 is 3.7%; that the rate of return since inception is 5.7%; that the assets under management as of June 30, 2016 is $28.3 million. Mr. Flewellen continued and provided an update on the current market and the effect of the UK's exit from the European Union on the market. 8. UNFINISHED BUSINESS: 8.1. Presentation and Discussion Re: Proposed Ordinance amending the City of Sarasota General Employees' Defined Benefit Pension Plan Attorney Christiansen stated that he and Pete Strong the plan's Actuary have completed the proposed Ordinance amending the City of Sarasota General Employees' Defined Benefit (DB) Pension Plan with clarification of the lump sum calculation which was discussed in previous meetings; that the language written by Mr. Strong indicates the method which the lump sum should be calculated. Treasurer Lege stated that Pension Plans Administrator Ramphal provided Mr. Strong with calculations that were done in the past and it was determined that those calculations were done with the deferred annuity factor, which Mr. Strong deemed was interpreted correctly. Jeff Amrose, Senior Consultant, Gabriel, Roeder, Smith and Company, came to the Board and confirmed that previous calculations were done with the deferred annuity factor; that the language was not clear in the Ordinance and has been made clearer in the proposed Ordinance. Secretary Nadalini agreed with Mr. Amrose, stating that the reason the Board is discussing this is to provide clarity as the result of ambiguity in the Code, as the Pension staff must follow the Code. Vice Chair Chapdelain stated that there has not been an issue with former staff interpreting the Code the proper way; that it was a misinterpretation by current staff in calculating the Code and someone has to be held accountable for the misinterpretation. Secretary Nadalini stated that there is nothing in the Code that references the deferred annuity factor; that current Pension staff followed the Code; that if the proposed Ordinance goes before the City Commission and the language is adopted, it will provide clarity going forward. Mr. Amrose stated when the Code talks about the calculation of a lump sum for terminated vested employees, it does reference a deferred factor; that the ambiguity comes in when there is reference in the Code to the annuity is to be paid. Book 1 Page 28 07/18/16 8:30 A.M. Book 1 Page 29 07/18/16 8:30 A.M. A motion was made by Trustee Schneider to approve the proposed Ordinance amending the City of Sarasota General Employees' Defined Benefit Pension Plan. Attorney Christiansen asked the Board what they suggest in order for the motion to be approved. Discussion ensued regarding approving the proposed Ordinance. A motion was made by Trustee Schneider, seconded by Treasurer Lege, to approve the proposed Ordinance amending the City of Sarasota General Employees' Defined Benefit Pension Plan. Motion carried unanimously (6-0). Treasurer Lege stated that he believes the IRS language in the Code should be changed sO that there will be no issue with interpreting the language in the future. Secretary Nadalini agreed, stating that she is in favor of providing clarity in the language of the Code to avoid any future errors; that she is supportive of the proposed language in the Ordinance to submit to the City Commission. In response to a question from Treasurer Lege regarding the overpayment of the lump sum, Attorney Christiansen stated that the Board has a fiduciary responsibility to recoup the overpayment of the lump sum from Mr. Goenne; that he will draft a letter to Mr. Goenne, requesting a repayment schedule. A motion was made by Treasurer Lege, seconded by Trustee Schneider, to authorize Attorney Christiansen to draft a letter to Andrew Goenne to recoup the overpayment of the lump sum. Motion carried 5-1, with Secretary Nadalini voting no. In response to a question from Vice Chair Chapdelain to Secretary Nadalini asking why she does not support the Board seeking recoupment of the Mr. Goenne's overpayment, Secretary Nadalini stated that she does not believe the current Code provides clarity in the language and does not support the action being taken. A motion was made by Treasurer Lege, seconded by Trustee Schneider, to request that the Pension Administration recalculate the lump sum payment of Todd Simmons. Motion carried unanimously (6-0). 9. NEW BUSINESS: 9.1. Presentation and Discussion Re: Revised Summary Plan Description for the City of Sarasota General Employees' Defined Benefit Pension Plan Attorney Christiansen stated that the Summary Plan Description is required to be updated every two years and redistributed to plan members and provided the Board with details of the changes made to the Summary Plan Description, and Secretary Nadalini stated that once the Summary Plan Description is approved, it will be posted on the City of Sarasota's website and also on ePoint for members to view. Treasurer Lege stated that it appears the Summary Plan Description reads if someone retires and is reemployed with the City of Sarasota, they will be eligible to go back into the Defined Benefit Plan, and Attorney Christiansen stated that this is misleading because it is subject to plan provisions; that he will change the language for clarity to be approved by the Board at the next meeting. 9.2. Status Report Re: Annual State of the City's Pension Plans Workshop of the City Commission Pension Plans Administrator Ramphal stated that the Annual State of the City's Pension Plans Workshop of the City Commission will be held on August 23, 2016 at 5:00 p.m.; that the consultants, actuaries, and attorneys of the City of Sarasota's pension plans will all be in attendance. Attorney Christiansen stated that he has a conflict and Attorney Lee Dehner will be attending the Annual State of the City's Pension Plans Workshop. 10. ATTORNEY MATTERS: Attorney Christiansen stated that he is still working on drafting the Operating Rules and Procedures which will be available in the near future. 11. OTHER MATTERS: None 12. ADJOURN Chair Keeler adjourned the General Employees' Pensions Board of Trustees Regular meeting at 9:30 a.m. BRINKE Chair Barry Keeler Secretary Pamela M. Nadalini Book 1 Page 30 07/18/16 8:30 A.M.