MINUTES OF THE EMPLOYEE RETIREMENT ACCOUNT COMMITTEE REGULAR QUARTERLY MEETING OF SEPTEMBER 17, 2020. VIA VIDEOCONFERENCE, which is allowable under Executive Order No. 20-69 issued by Governor DeSantis on March 20, 2020 Present: Chair Jeffrey Vredenburg, Vice Chair Aaron Olson, and Treasurer Kelly Strickland. Others: Pension Plans Administrator Debra Martin, Senior Pension Analyst Anthony Ferrer, and Pension Specialist Peter Gottlieb. Absent: Secretary Shayla Griggs, 1. CALL THE MEETING TO ORDER: Chair Vredenburg called the meeting to order at 10:01 a.m. 2. PLEDGE OF CIVILITY: Chair Vredenburg stated for the record, "We may disagree, but we will be respectful of one another. We will direct all comments to issues. We will not engage in personal attacks.' 3. PUBLIC INPUT: None. 4. APPROVAL OF MINUTES: 4.1. Approval Re: Minutes of the Employee Retirement Account Committee Regular Quarterly Meeting of June 4, 2020 Presenter: Chair Vredenburg. A motion was made by Vice Chair Olson, seconded by Treasurer Strickland, to approve the Minutes of the Employee Retirement Account Committee Regular Quarterly Meeting of June 4, 2020. Motion carried unanimously (3-0). 5. QUARTERLY INVESTMENT REPORTS: 5.1. Presentation and Discussion Re: AIG Retirement Services, ERAC Report for Quarter Ending, June 30, 2020. Presenter(s): Gregg Hudak, Financial Advisor, Trent Harris, Financial Advisor, and Lilia Pivetta, Relationship Manager, VALIC Financial Advisors, AIG Retirement Services. Mr. Hudak, Mr. Harris, and Ms. Pivetta appeared virtually before the Committee and introduced themselves. Mr. Harris provided an overview of quarterly activities, noting AIG had sent out introduction letters stating that he had replaced Carolyn Garvey, he enrolled six (6) new employees, put together one (1) retirement plan, and has been attending teleconference calls for employees regarding conversion to the mutual fund platform. Book 1 Page 56 09-17-2020 10:00 a.m. Book 1 Page 57 09-17-2020 10:00 a.m. Mr. Hudak expressed his appreciation to the City Staff for their support during the conversion process. Ms. Pivetta also expressed her appreciation for Staffs support and assistance as well. Ms. Pivetta stated that the conversion occurred on Tuesday, September 15, 2020, and all participants have on-line access to their accounts. She stated all participants' beneficiaries would be converted by Friday, September 18, 2020; further, she and Karen Colquitt, also with AIG, would be available to assist with any issues. Mr. Harris explained he had received e-mails and phone calls from a few employees regarding the "quiet period" but no one had reported any issues to him after the conversion was completed. Chair Vredenburg thanked Mr. Harris, Mr. Hudak, and Ms. Pivetta for their presentations and efforts towards as successful conversion. 5.2. Presentation and Discussion Re: Quarterly Investment Analysis Review Ending June 30, 2020. Presenter: Howard Daher, Principal, Daher Capital Group. Mr. Daher appeared virtually before the Committee and introduced himself. Mr. Daher noted today's meeting will be the last before completing the conversion away from the annuity fund investment platform to the mutual fund platform, noting his presentation materials included the incoming investment options. He explained the conversion should provide cost savings to the Plan without limiting investment options, and explained that the watchlist under the annuity platform had seven (7) funds, where under the mutual fund platform, the watchlist has two (2) or three (3) funds, suggesting a higher quality of investment options. He asserted the Plan's mutual fund platform is comparable to those used by substantially larger plans. Mr. Daher reviewed the second quarter financial market activity, noting the S&P 500's gains, various sector performances, and questioned how is the market sustaining positive returns considering the multitude of negative economic indicators. He anticipates market volatility in the fourth (4th) quarter which is traditionally more profitable, despite continued concern for other indicators such as employment and personal debt. He believes technology, communication, and health care sectors will continue to perform, but did not have predictions for the industrial and financial sectors. He recommends continued contribution and participation in investments despite the market uncertainty, and noted investors are leaning towards defensive positions. Mr. Daher pointed out that the Plan continues to offer the Wellington Fund, and he expressed support for the Plan's decision to add target funds as additional options for diversification and age-appropriate risk tolerance investing. Mr. Daher, Mr. Hudak, and Hr. Harris discussed participants' ability to determine personal allocations of their contributions. Mr. Daher stated there are seven (7) funds on the watchlist under the annuity platform, one (1) of which will carry over to the mutual fund platform, Ariel Fund Investor, which has a high risk/high return strategy. Vice Chair Olson questioned how Ariel Fund Investor could be considered a good, high performing fund with a more than 20% gain for the quarter when itis down 20% for the year. He further asked for clarification of how participants are being educated on conservative investing. Mr. Daher addressed the education question by describing the difference between large-, mid-, and small-cap funds, and how each has performed in various markets, and stated that his responsibility is provide an adequate array of investment options for the spectrum of conservative to aggressive investors. Mr. Hudak and Mr. Harris explained they generally try to assist participants in determining their personal risk tolerance and provide investment options which fit their risk profile and are available to discuss further upon participants' requests. Mr. Harris stated they have not changed their definitions of conservative, moderate, and aggressive investing strategies in the context of the current conditions, and that from an investment perspective, the market's downward and upward trends in 2020 create significant opportunities for investing. Mr. Daher concluded his response to the question by discussing the nature of risk, noting even the guaranteed income fund, which is amongst the most conservative options available, risks underperforming inflation. He explained that at the next ERAC meeting, he would discuss just the mutual fund options and would have a new' watch list. Chair Vredenburg thanked Mr. Daher for his presentation. 6. UNFINISHED BUSINESS: None. 7. NEW BUSINESS: None. 8. OTHER MATTERS: Chair Vredenburg advised the City Commission may soon request status reports from advisory committees. Plans Administrator Debra Martin stated that she was unaware of any current requests, and noted the Pension Plans each submit annual reports to the City Commission, and therefore the Commission may be looking for additional information in the context of operations under the COVID-19 pandemic. 9. ADJOURN. Chair Vredenburg adjourned the Employee Retirement Account Committee (ERAC) Regular Quarterly Meeting at 10:45 a.m. Oblu SOucklao Chajt eyVredenburg Treasurer Kelly Strickland Book 1 Page 58 09-17-2020 10:00 a.m