Good afternoon. Welcome to the General Employees Retirement Committee meeting. It is Tuesday, April 1st, 2 o'clock. Let's do a roll call. Okay. Trustee Hilton. Here. Trustee Genoa. Present. Trustee Pen and Allen. Here. We have a quorum we can proceed. Thank you. Good.. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank up on the microphones. Hear me back there. While he is looking does everybody have the draft? Yeah? Okay. I'll wait to see. Oh wait, there it is. It's on. Okay. Okay. Good afternoon. here to present the results of the September 30th. Retirement plan for General Police at the City of North Miami Beach. For the plan year ended September 30th, 2024. So nice to see you all again. And you're right. It does seem like I was just here again. So just to remind everybody that it is marked draft, but we don't anticipate there being any changes. We only considered final ones voted on and approved by you all. Okay, so with that, I'd like to turn to the independent auditors report. It's the third page in right after our table of contents. It's labeled independent auditors report and I'm pleased to present what's known as an unmodified opinion. It's known as unmodified because the financial information being presented is being presented in accordance with generally accepted accounting principles without any needed modifications. So with that, I'd like to actually jump into the financial information, which can be found on page 9. So while you're turning to that page 9 is your statement of fiduciary net position, what it is is an accounting as of the end of the fiscal year-ended plan of September 30th. We showed two years. 2024 with 23 comparative, the most current years in the left hand column label, 2024. And so when I presented to you all and I find the best way for you to understand it is actually to go all the way down to the bottom. The left hand column because this is a snapshot of what the assets liabilities in the total net position was as of at point in time. So you'll notice that the amounts restricted for the defined benefits and the drop benefits totaled, 97,791,800 dollars. That is a 13,341,419 increase from last year's balance of $84,453.81. So how you increased by $13.3 million is illustrated on the next page, page 10. So how this is organized, how page 10 differs from page nine, page 10. Okay, and so how this is organized, how page 10 differs from page 9, page 9 was just shows you what the balances were as a September 30th, page 10 shows you the activities. So just to show you how these two relate to each other, 2024 again is in the left-hand column, I find it easiest to understand if we work from our bottom up. And so if you look on the bottom left hand column, there's that same 97,791 800 I talked about. The number above that 84,45381. It's labeled beginning, but really that's just what it was at the end of last year. And then there's that increase of 13,341,419 I talked about. And so you have an increase when your additions to the plan outnumber your deductions, okay? When you have more coming in than going out, your balance is gonna go up. Conversely, we saw a few years back where you had more deductions than you had additions that went down but we want to continue seeing that grow. So to understand just let's go through the two pieces. The first being on the addition side there's two primary sources of your additions. They are in the form of contributions coming from first from the city of North Miami Beach that as a reminder is actually determined every year. And so that's what was determined to be the city contribution and that was received during 2024. And then there are the contributions coming from those active employees. And so that is a portion of pensionable wages. And so as your salaries and individuals, actual head count increases, so too, will the number of contributions increase. But in any event, your total contributions went from $4,631,00051,193 during 2024. And then really, and you'll see, and I know Scott's up right after me on the agenda, but the second one is the second one is the second one is the second one is the second one is the second one is the second one is the second one is the second one is the second one is the second one is the second one is the second one is the second one is the second one is the second one is the second one is the second one is the second one is the second one is the second one is the second one is So when you look at your contributions, the investment performance and that small other income, you had total additions of 22 million for 2536. All right, on the flip side are your deductions with the largest of course, being the benefit payments. Those are the amounts that are being paid out to the retirees. And so that number fluctuates and it went up by over $226,000. And so that is going to really be based upon additional retirees into the plan, which we saw in 24 compared to 23, as well as those retirees who retired mid-year during 23 who now we're only getting maybe six months, three months worth of benefits for 24. Now they're getting the full 12 months of their retirement benefits. So that's why we saw that also go up in 24 compared to 23. distribution is, drop distributions is the second next largest and that will we will fluctuate based upon those participants in the drop plan. What their individual drop balances are and when they're taking them. So we were just looking at 2024 and we saw that in the prior year in 23 that there was only two drop distributions that were made over $84,000. However, in 24 there were seven distributions that were made over 84,000. So you had seven, there may have been more, I frankly don't know what the total number of drop Distribuses were But certainly larger so we would after seeing that we were expecting that to go up and then the final Category is your admin expenses we give a breakout of the admin expenses you could find that on page 26. So on page 10 had the total and on page 26 gives you a breakout. Well, what those administrative expenses were. And so there are a couple of categories in total. It was down around $20,000. So we had a couple of reasons why the largest difference being you can see in salaries. So it was a big reduction that really is due to you have Mr. Gail as your only administrator. Whereas last year you had Mr. Gail and Marty's salaries We're included in 23, so you didn't incur that, so really that's what the biggest decrease was in that category. So that was the biggest decrease. Actuarial, I think really, I don't recall exactly what was going on, but there may have been some, a study was done in 23 that wasn't, you didn't incur the same expense for the study in 24. So you're expecting that to go down so that was almost close to $10,000 decrease. I think in accounting why the increase there and travel is due to just the usage and timing of one in voices were paid really. But the biggest difference really was as I mentioned. to just the usage and timing of when invoices were paid really. But the biggest difference really was, as I mentioned, the payments due to Marty not being on payroll in 24 compared to 23. Okay, nothing else really stood out. We understood all the differences. Why? Any questions on page 26? Nope. Okay, just jumping back to page 10 then. Just to wrap up. So in summary, if you're back on page 10 and looking in the middle of the page, total additions were 22 million for 21 approximately versus deductions of $9,779,000 approximately. So your additions, you added $13,341,419 of more additions coming in than you had going out. So that's why the increase. All right? Thank you. The increase is good. Absolutely. I don't like our investment state good. Yeah. I'm not going to throw that out. No. Yeah. This is the best. I'm going to mark it out of the way we can know. Certainly, it's certainly not. Well, I'll say this as one of your many professionals, my hindsight's always 2020. So, you know, I'm living back in September 30th. So, by this time, I already know what happened. You know, I always say I report the news. I don't create it or we're doing it. I'm just here to report the news to you all. So, any questions? For the most part, that is the presentation for the audited financials. Any questions? Okay. So I started off by saying that we need a motion by you all. I move a motion to approve for approval. I agree. Okay. Okay. The initial statements approved. Excellent. One that says final. Okay. So also in addition to our that, we get a management representation letter. Also, I don't know if it was signed or it. All right, so I think in, I don't know, I won't speak for Madison because again, I have the easiest job, but probably just for the records, a motion authorizing the chair to sign it just so that you have it memorialized. Did the sign-in have the representation? That's signed already, right? It's just signed or signed yet. Yeah. It's a view to ratify the signature. That's why she went to law school and I didn't. So basically a motion to ratify the signature? Correct. Okay, motion to ratify the signature. Second. All in favor. Aye. Okay. Okay, great. Thank you all so much. You very much. And then we'll get a PDF over to Ronaldo. And then if any bound copies are needed, we're happy to provide that as well. Thank you. Great. Well, remember, we're going to do this again next year. And we're going to say, where are we? Why don't we just hear doing, that's right. Yes, please goodness, that's true. So everyone, be well. Thank you. Thank you. I'll get a little bit of it. Great storm consulting. Good night, guys. Nice. Scott, oh, all right. So a couple things. Did you like one? I think you saw it. Yep. So this report is as as of 1231. I can go over it in great detail, but everything is changed now. We just this is so this is the port quarter. We just finished the first quarter. But what if you would like, I'll kind of hit the highlights of what transpired during the quarter reporting on, that's having an impact on this quarter right now. Is that fair? So let's take a look. I want to show you. So as was just reported in the fiscal year end of last year, which is September 30th, we knocked it out of the park. It was an amazing year for the market. We did very, very, very well. And then the fourth quarter hit. And if we take, let's take a look at page four in your report. It's the should look like that. Yep, that's it. You got it. Yeah, page four, page four of that report. I might have given you two accidentally. So for fiscal year and everything was up, everything was wonderful. And then the fourth quarter hit and the market started absorbing what's going on with the election and all of that. And what we see is if you take a look at the fourth quarter, really, if you take a look at the large cap index, it was positive, but if you take a look between value and growth, only the growth was positive. And in the mid cap index, it's the same thing. The index was positive, but if you break it down between value and growth, only growth was positive. And it was just barely positive for the index. The index was up about a half a percent and for the small caps it was up about one third of a percent and again only growth was positive. So really during the fourth quarter the only place that you could be that really did well was in the large cap growth space. Growth only and then within the growth only large companies. And if you look at the bottom of that page, out of the 11 sectors of the S&P 500, only four were positive. Everything else was negative. Now, knowing that, and knowing that you all use what we call asset allocation, which is modern portfolio theory, which is a diverse portfolio, that should kind of clue you that if you have thing's working and you have a diverse portfolio with a bunch of things in it, it wasn't a good quarter, right? Wasn't terrible and relatively you did okay. But let's look at the next page, international. International is down 8%. So even international was negative. Now, the quarter before this, international was the most positive thing on the page, and it's because the value of the dollar collapsed. This quarter, the value of the dollar rallied, which is bad for us as an international investor, and that's why we have this negative returns. And then lastly, look on the next page, fixed income. Everything is negative except for cash, right? So, in last quarter or the previous quarter we performed presented on, everything was positive, like double digit positive. So there's just been a lot of market volatility in and it has, it has, conclude, has, it has continued even during this quarters. If you've watched the news at all, you're seeing 500 point swings in the market almost every day. Now a lot of that, the economy was doing fine. A lot of that is driven by the new administration, right? These tariffs coming on and that's creating uncertainty in the market. The market does not like uncertainty so that creates volatility. And if you think about it for a moment, if you have a 500 down point day one day, you say, okay, well, that's bad news. Well, if it's bad news, then why is it up 500 points the next day, right? Did something happen over that eight hour period that causes these? No, what it is, it's, hey, we're gonna put a bunch of tariffs out and then the next day, you know what, maybe we won't put a bunch, maybe we'll put some out. And then the day after that, it's, you know what, we're gonna double down on tariffs. And, you know, I don't know what the end of the day what's gonna happen. I do believe that this is the administration's way of negotiating to get a better deal for the long run. I have no delusions that these tariffs are going to stay in place for the long term. Right? I believe so what's happened is our country had lots of tariffs on it from other countries and we didn't have tariffs on them. It wasn't a fair play in field. It was all a result of after World War II. What we did is we gave other countries an advantage as a good partner to help them rebuild their countries that were devastated after World War II. Europe, Asia, all over. Well, those trade deals are still in place. And so, Trump is like, you know what, that's not fair to us. You guys are just as strong as us. There's no reason to have that uneven play in field. He said, so I want you to take those tariffs away on our products in your country. And he said, no. So he said, okay, that's the way you want to do it. We're going to tariff everything you have. If you're going to keep tariffs on us, we're going to put tariffs on you. Now, as an economist, I believe tariffs and subsidies are terrible. That's the way you want to do it. We're going to tariff everything you have. If you're going to keep tariffs on us, we're going to put tariffs on you. Now as an economist, I believe tariffs and subsidies are terrible, right? You don't want to subsidize something because people do it only because it is subsidy and not because it is the right thing. And you don't want to tariff it because it is basically making winners and losers. If I put a tariff on you but not you, I'm going to use your stuff. So I've just made it an unfair playing field. So I think at the end of the day what he's hoping is that he gets rid of all the tariffs. But until that time, it's going to be volatile. Because we don't, so tomorrow is the day where all of these tariffs are supposed to go to be implemented. We don't even know what the response to that is going to be. Now I'll tell you that so far all the tariffs that he's announced, there's been a retaliatory tariff on their part. So if this thing keeps getting, keeps, you know, tit for tat, it's going to be bad, I think, for the short term, right? So we have a very defensive portfolio. This quarter that we're reporting on, Not the one that we're reporting on, the one that we're in right now, March 31st. All of your managers have done very defensive portfolio. This quarter that we're reporting on, not the one that we're reporting on, the one that we're in right now, March 31st, all of your managers have done very, very well because you're defensive manager in the market was down, right? So they've done very, very well. So I say all that to say, look, I think we're gonna be in for a bumpy ride for the next quarter or two. I do think that it'll resolve itself. And at the end of the day, what the hope is, so we've got, we're page four, page six, I'm sorry, what the hope is is when all these tariffs are removed, it's going to make the market explode and it'll be very, very positive. Now, that's the economics part of it. Just from watching news and politics for 50 years, I would bet a lot of money that all of those tariffs will be removed three or four months before the midterms next year, so that the news cycle is gonna be, oh look, the market's up a thousand points, oh look jobs, oh look, inflation's down. It just always works out that way, right? Whether that's intentional or not, but just always works out that way. Just before elections, there's a bunch of really good news. So he takes the hit on the front end when you have the house in the Senate. You got all three, get through all the bad stuff, and then right before there's voting, you remove all the things that caused the volatility. That's just a sense. Let me just show you a couple things that have happened. On page 11 it's very interesting to me and we've been talking a lot about this right over the last couple years. When everyone says hey rates I got to go down, rates I got to go down. Nearly every meeting you hear me say, well, which rates? Because you have this yield curve, the Fed only controls the short end of the curve. The market controls the long end of the curve. So the Fed can make short rates go down, but that doesn't mean that the long term rates are gonna go down. And we've been talking about that and look at what happened during the past year. So in the end of 23 is that orange line, China orange is red line. You have very high rates on the short end. This is the inverted yield curve we talked so much about and 4% on the long end. Look at the green line. That's just one year later. That's December 31st, 24. What happened is, yes, short-term rates did go down because the Fed dropped rates. But look at that. The long end went up. And when rates go up, the value of bonds go down. That's one of the reasons we went into a short-term manager. So we went into a short-term manager, not long that we used to only have one manager. And I said, hey, with the rates the way they are, very high on the short end, we need to take advantage of that. And by the way, when rates go down, that's going to give those managers a bump, right? So we did that. When we get to the fixed income, I'll show you that. But then, and then what we also did was took money away from the long-term manager. Well, when interest rates go up, the value of bonds go down. So that helped out on both ends of that. Because if we would have had more money in the long end, that would have hurt us worse, right? So that helped out quite a bit. That's kind of the big thing. Some of the other stuff has to do with pricing and valuation, but that's already corrected itself by now. So let's take a look at page 17. So this is your, if you look at the chart up in the top right, the circle with all the lines intersecting, that's the benchmark. The portfolio is the blue box. And what that tells us is that you have a little bit lower risk and a little bit lower return. And you look down on that bottom line where it says alpha, you have a positive alpha of 10, which means you're beating your benchmarks on a risk adjusted basis. And that's what this board has always strived to do is get the return with the lowest amount of risk. If you take a look at the one year number and in 1231 you're up 12% for the quarter you're down about 10 1 1 1% or 0.15% of 1%. Little bit below the benchmark. And again, that's remember I talked about your managers are very diverse. Well, diversity did not work during this quarter that we're reporting on. And that's why. But all in all, your managers are doing fine. Let's take a look at the next page and see how you're allocated. Let's go to page 19. So you see, we're pretty close to our targets across the board, okay? And where we're underweight that fixed income, if you take a look down in cash, we're overweight cash. And cash was really the only positive thing in fixed income for the quarter. And that was by design, having that extra cash in there. We got a little over two million. Oh, best thing I forgot, almost forgot. The first time we've been over 100 million. So excellent. That's a big deal, being over 100 million dollar pension. Yeah, that's not going to be that. So let's take a look at the next page. I'll go over the managers. Buckhead is your large cap value manager. I love this manager because it's a low volatility manager. If you look at the up caption, down caption, if you look at the standard deviation and beta, it's a low volatility manager, but that low volatility is what causes it to have that high return. Take a look at the one year number. 1522 versus 1437. The three year number, which includes the negative year, that's the best performance period because it protected so much on the down. Now, Clearbridge, in the large cap growth space, which is your next two managers, Clearbridge and Saltgrass, the large cap growth space has been driven by five stocks, right? Our seven, however you know the magnificent seven, the fab five, depending on what time frame, but your managers are not going to keep up with that because they're not going to be that concentrated. They're not going to be overweight, tech as much, and they're not going to be overweight just five stocks. They're going to be diverse. So if you take a look at the last couple of years, they've been behind. If you take, I mean, but let's let's define behind the one year number Clearbridge got nearly 29%. Now the benchmark got nearly 34%. Right? I'll take that all day long. I'll take a manager that's going to mitigate risk that can participate in the upside. I'll say this and I'm trying to get the exact number. But Doug, I'm asking for it now just because we didn't have it yesterday to get updates. But just about every active manager in the large cap growth space has outperformed this quarter because it's those five, six or seven stocks that are driving the benchmark down. And so they're underway, though. We take a look at the next page, sawgrass, same story, 18% for the one year. But again, the market was up 33. I mean, that's a big number, but we'll see the positive impact of that, the quarter that we're reporting on. Now Boston Partners just knocks it out of the park. It's the small mid-value. And in up periods and down periods, it's out-performed. And you take a look at that up and down capture at the bottom and it shows you that. In the up periods it's more than 100% and then the down periods it's less than 100%. So it captures the best of both sides of that. And this is what's interesting. So you say well Scott look at the standard deviation and beta which are measures of risk. are higher. Well, if you pill the onion back a little bit, it's more volatile only on the upside, right? So no one cares when you're more volatile on the up. You want that. It's the protection on the down that it affords. And then you see MTD advisors. It's kind of a mirror image of that. It has a little bit higher risk, still protection on the downside. And for the one year number, 35% versus 22%. I mean, a home run with MTD, MDT. International, not quite as exciting. You see for the quarter, I hate to say it outperformed when it's less negative but that's what the managers are supposed to do they're supposed to protect right so it did do better and then hearting hearting love the next international growth over the long term it's done better big contributor to the portfolio you take a look again at that up and down capture, protection on the down, participation on the up. It has almost the exact same level of risk, but with about a 1% higher return. And then if we take a look at the Garcia Hamilton, so this is the short-term manager that we got in. Take a look at that one-year number. It's 3%, OK? 3.11. Let's look at the next page at the one year number. It's 2%. So we took half your portfolio and put it in the short term just in 23, just a year ago. And it picked up an extra 1% on $10 million. And it was safer to be risked the portfolio. That was a home run of a decision. And then on real estate, it's, you know, it's so hard to be positive about real estate, but I'm going to try. So take a look at the return. It's about 1%. Okay. So we've talked to many real estate managers and many of them said, hey, they think we're kind of at the bottom. We think the depreciation and the value of the property has gotten to the bottom. So when you see that one, and this manager pays about 4% a year. So if you see a 1% return for the quarter, what that tells me is that that's all income. That the appraised value is stabilized and that's the income portion of the asset. I'm hoping that trend continues. It's hard to know if one little time frame, if one little time frame is going to turn into a trend, but we're hoping that's the case. The other silver lining is we took this money from bonds. So we had bonds. We said look, interest rates are high. When the value bonds go up, sorry, when interest rates go down, the value bonds go up and vice versa. So we said look, we're not making any money on on bonds. We need to do something else with the money. So we put it in real estate. If we take a look at the 10-year number Garcia Hamilton that's where the money was was 2% and for the real estate 2.9. So for $7 million over a 10-year period you got about an extra 1% return for about the same level of risk. So again, taking that money from bonds and putting it in short term and taking the money from bonds and putting it in real estate has been a great allocation decision. It's just relative to the benchmarks the managers were less than stellar. And then on the global infrastructure, again, that was meant as a diversifying agent. You're getting 8%, you're getting about half of that in the form of income. And it has them, I would say, a low risk. So these are stocks, right? But look at that standard deviation. 12 and a half. If you think about some of the other managers we looked at they were in the 15 to 20 range. So it's lower risk you're getting a little bit lower return but you're getting a really big positive alpha. There's no problems with anything in the portfolio I don't think. I think next quarter you're going to see some of these managers that were kind of left behind in the last year or two are going to be the ones that look really good this quarter. So and you're in your compliant. So I'm not recommending any changes at this point. I like having the overweight to cash right now. That's going to help out as the market falls. When we, you know, there'll be a time when I say, hey, let's not be overweight cash anymore. Let's just put it all in the market. Did we do a little bit balancing and then we're going to get the money you needed to put? Yes, ma'am. So whenever there's money needed, Renato tells us what it is and then we tell them where to take the money from which managers and typically it's part of the rebalancing is kind of woven into the fabric of that things that are overweight will take the money from that and then so that brings them closer to their tarouts. Yeah, correct. Very good. That concludes my prepared remarks. Yeah, and we love your report. All right, the plan actuary report with our October 1st valuation. Thank you everyone. Good afternoon. Can you hear me? Okay. Yes. My name is Shelley Jones. I'm an actuary with Gabriel Road or Smith & Company and I'm going to present the actuary evaluation. It's in the blue book with a little half moon on the cover there. The actuary evaluation is performed annually and it provides the contribution that really needs to be made. It is made in the future. It is for fiscal year ending September 30th, 2026, but we do it early so that all of so So that the city can be aware of it beforehand. For budgeting purposes correct. The evaluation also has plan membership information. It has accounting information. It has state required exhibits. It's very long. I'm not going to go through it page by page with you. But I do want to hit the highlights for you. And that really starts on page four. It's our executive summary. And essentially, bottom line on top is the contribution number that is determined through all the calculations in this report. And that number is the first bolted number, which is 5,493,196 dollars. It's 44.1% of payroll. And that number, the 5.5 million dollars approximately, is going to be paid by members, active members contribute 7% of their payroll. In dollars, we anticipate that to be $872,030. And then the remainder falls to this city. And the city's contribution is $4,621,166. It's 37.1% of payroll. That is a reduction from the prior year. The prior year's contribution was about $4.9 million. It was about $350,000 higher last year. So it is down The main reason for that is salaries actually increased dramatically in this particular year. And because salaries increased, the dollar amount of contributions from members increased. So the contribution in terms of the city decreased. But also when we do the calculation for the amortization payment, because the plan is currently has an unfunded liability, meaning that the smooth assets of our lower than the liability, the accrued liability. And that, that unfunded liability, which is about $46 million, is being paid off by an amortization payment. Emeritization payments over various, and I'll show you them in the back. But essentially those payments decreased because we have an assumption for future salary increases and it's based off the 10 year historical and the 10 year historical increase in salaries increased dramatically. And so that lowered the payment, sort of like a bond, when that increases the payment decreases. So the contribution itself decreased, So the contribution itself decreased, the unfunded liability did go up a little bit. We did have a loss for this particular year. That means that the funded ratio did decline or the unfunded liability was higher than we had anticipated. And so, two reasons for that really salaries, again, they increased more than we had anticipated. And that drove up the liabilities because a key component in the pension benefit itself is salary. And so when those go up higher than we had anticipated, that increases the liabilities more than we had anticipated than that creates a loss. And that's really what drove the loss. Offsetting the loss was the assets on a smooth basis, on a market basis, and as you've just heard a couple of times now, fiscal year 24's market value return was phenomenal. It was over 20% at 20.88%. And that's on a market value basis. But remember, when we do our calculations, we smooth that in. We don't actually recognize all 20.88% of that immediately. We smoothed it over five years. The smooth actuarial return this particular year was 8.14 percent. So still above our target of 7.25. So this year on an asset from an asset perspective was a good year and it it did offset some of the losses that we saw in terms of salaries. Sousa really was the driver of the increase in the unfunded liability more than we had anticipated. Any questions on that? The main kind of figures in the report are on page 12. So if you've flipped to page 12, this gives you a sense of last year's valuation and this year's valuation. We did not make any changes to the assumptions or the benefits this year. It was purely experience that occurred during 23 to 24, so nothing going on in terms of methodologies or benefit changes. You can see item A is the participant information. You can see active employees increased about 5% the total amount of folks in the plan. If you were to add items A1, A2, and A3, you'd see about a 3% increase in the total amount of members. So the plan itself grew in terms of size. The annual payroll item A5 is really kind of the biggest jump this particular year, it increased 20%. That really translated to the total normal cost, which is the cost of a year of benefits of all the active employees. That is item B, and it's a major component in the contribution and that increased as a dollar amount, decreased as a percentage of payroll because the payroll went up so much. The unfunded accrued liability, which is item E, is the difference between the accrued liability item C and the smooth value of assets item D. And you can see that increased as a dollar amount, decreased as a percentage of payroll from 23 to 24. And the, as I mentioned, the city contribution decreased as a dollar amount and as a percentage of payroll. The vested benefit security ratio item I is based on a marked-market ratio of the vested, only the vested liability. It's a crude to date, meaning no future salary increases. That increased dramatically from 23 to 25. Really that was because of that market, because that's market market value basis. So that's why you see such a dramatic increase in the funded ratio there. Any questions on that? On page 16 I wanted to mention... sorry what passed it. Page 16 because I'm going to go through the assets, you just heard your auditor talk about them in detail. But I did want to talk about the smoothing that we do. I'm not going to go through the calculation, but I wanted to mention item H at the bottom there. Item H is the difference between the market value and our smooth value and in the 2023 column for item H You can see it was a negative number meaning we had unrecognized losses To the tune of about four million dollars that we knew we were gonna have to recognize We've sort of flipped that script with such a good market value return this particular year with the 20.88 percent return in market value. So now we have unrecognized gains of about $6 million and that's item H in the 2024 column. So now we have unrecognized gains that we know we're going to recognize over the next four years to the tune of about six million dollars and that will lower the contribution. Barring any other noise, we have unrecognized gains and that is that sort of a very different outlook than that when I came here last year and presented the report. Any questions on that? Page 48 provides you with some figures on the salaries. The salaries were really different than we had anticipated. Somebody really big. Yeah, well, just from what we had anticipated, yes. But honestly, this essentially salaries have increased more than we had expected, not just in this plan, but frankly across all of our plans. And it's been the it's it's been it's even in the state in the Florida retirement system as well they've had losses on salaries. It's it's in terms of higher salaries than that then the actuary had anticipated previously. So for the current year on page 48 in item A, you can see in total, when we had two full years of salaries, the salaries increased 10.48%. We had anticipated the increase being 4.4%. So obviously a big big difference there. And even in the last three, five and 10 years at the bottom there, you can see salaries have outpaced our assumption over the past, over those 10 years as well. Any questions on that? Based on that, are you going to be increasing the assumption? We can in the short term, I think we did do an experience study recently and we did increase the assumption because it was hovering around four. Now it's about 4.4. So we did increase the assumption overall. We can in the short term, but in general, we don't anticipate that being, we don't anticipate 10% being the long term increase. So we wouldn't recommend increasing it. We have increased it potentially in the short term, but it's hard to say if that's going to continue. So our assumption, we're trying to look at it a long term and even though this particular year was a higher than we had anticipated last year it was a lot closer at 4.79 so it's not you know if you look at it just year by year, it's difficult. So not an exact science. It's not an exact science, but we did increase it recently. So, um, yeah. We can lean towards conservative anyway. Yeah. Because it's a bottom should drop out of the bucket for you, it's gonna be in a bad place. Yes, we don't need that. It's okay, I'm sorry, it is fine. Any other questions? The next page, sorry, page 50. We have, again, the assumed rate of return on page 50 is 7.25 this last year. The market return 20.80, our smooth return was 8.14. So on a smooth basis, we did beat our assumption. Termination was kind of an outlier this year in terms of previous years has been again and this year it was a loss, a slight loss. There were fewer turnovers and we had anticipated more people stayed on than we had anticipated. It was a slight loss on the plan overall, contributing to the salary loss on the liability side. And on the asset side, we had an offset in game. Any questions on that? We have included on page 53, 54, 55, and 56 some history of the funded ratio to give you a sense of over the last 10 years and it really depends on what kind of person you are. If you prefer data charts than that 53, if you want to see a graph or more of a picture, 54 is where you're gonna wanna turn. But essentially this gives you a 10 year look back of the funded ratio. And as you can see, it sort of has stayed relatively flat around 72% on a smooth basis. Over the last from 2022, 2023 and 2024, we've seen decreases in the funded ratio. And essentially, there's been a lot of downward pressure on the funded ratio on a smooth basis, really because we've changed the assumptions, we've lowered the investment return from 7.75 to 7.25. We've also had, as I mentioned, experience that has lowered the funded ratio, and there were also benefit changes that lowered. So there's been pressure on the funded ratio, and that has sort of bucked to the trend of the funded ratio increasing. But the way that we fund the plan is to fund to 100%. And that's what the calculation of the contribution is incorporating. So essentially we're funding for this craft to be going upward. Yes, yes, you do. Yes, yes. They tend to be younger plans. They tend to be younger plans where they haven't had a lot of experience yet. Or they don't have any retirees. They have more active than retirees. Yeah, I'm interested. It looks like we're doing pretty good. Yes, and on the, well, we're on page 55 and 56, that gives you a sense of the market value. This is obviously a more volatile graph because we're talking about the market value versus the smooth asset value. But you can see again, it's sort of been relatively stable. And then the last several years, the last few years have been more volatile in terms of experience. And we basically, because of the 20.88% return for fiscal year, we're kind of back up to the 70 percent That we've kind of been hovering around in this in this chart for the last 10 years Any questions on that The last but not least on page 61 is the unfunded liability, which is the difference between your smooth value of assets and the liabilities. And it's 46.4 million dollars. We're paying that off. We obviously want to be 100 percent. We want this to be zero We don't want it to be 46.4 million. And we're making an amortization payment at various points to basically pay off the unfunded liability, which is $3.7 million. Any questions on that? Yes. I did want to mention one more thing that doesn't have to do with this year's report, but with next year's report, the FRS, the Florida retirement system did an experience study and they found that general employees are living longer. And so, particularly male general employees, they increased the longevity for 62 year old male by about 0.7 years, which is a long time. In the actual averages. Enjoy. I'm excited. I wonder if it's on the floor. Be when folks, they didn't see a material change in female longevity. But they did. But we are required to utilize the Florida retirement systems mortality. We don't have a choice in that. That is Florida statute. And we will be incorporating that change in next year's valuation in October 125. And that will increase the liabilities by about 1%. So we are going to see some pressure. And in terms of the contribution, it will probably be around $100,000 of an increase in the contribution approximately. But that is for kind of next year. That's sort of looking forward down the pike of what's to come. Let's come and we know we have to incorporate that. One of our members asked me if what the effect would be if employee contributions went up to 8%. Yeah, so anytime the employee contribution goes up the city's contribution would go down by that amount. So if it was 1% of pay, the city's contribution. So right now the city's contribution is 37.1% of payroll, the contribution would be 36.1% for the city and then the contribution for employees would be 8%. So the total contribution wouldn't be impacted. It would be essentially the split. Okay. I think she was thinking what you said, but we're at what 66%? Yes, on a smooth basis. Currently, the fund is 66.4%. And so an increase in contribution from us doesn't affect that number. It wouldn't. No, only an amount, if we contributed above the minimum required contribution would impact the funded ratio immediately. So the city's contribution states, states what it is now, for any wooden, uh-huh. Right. So if members contributed 8% even though they were only required to contribute 7% then yes, the funded ratio would increase. And the city contributed the 37.1% of payroll that we calculated. Yeah, anytime you contribute more than the minimum, because what we're calculating is at the minimum, that needs to be made to continue to pre-fund benefits. And typically the city's gonna budget for that exact dollar amount. Yes. They're not going to go. Now maybe if something were to happen with union negotiations, could it usually when they change an employee contribution, negotiate for some benefit? And then you offer, okay, we'll pay another 1% into our pension, you know, if you give us this or that. Okay. Welcome back with that response. Thank you. Now, where these numbers given to the finance department? No, they haven't been approved by you all. You have to be approved for one. Right. Yes. I usually get them to them after a couple of minutes. Okay. Thank you. Well, oh, can I mention one more thing? Sorry, I provided you a little sheet here of what's going on at GRS. I don't do a great job of letting you know kind of the free stuff that you have for what's what we have at GRS, which is if you go on our website, we have a plethora of published materials that are all about funding and different topics. And we have actuaries all over the United States. So it's not just a, we have a ton of clients in Florida. We have probably around 200 clients in Florida, but this is a share for all across the United States. We also have GRS trend line, which gives you a sense of your benchmarking against other Florida retirement systems, general retirement systems. If you go on our website, you can log in and that information. We basically, we gather all the data that we can on our clients and we publish them so that you can see and benchmark yourself against others, it can be a helpful tool if you're trying to figure out, oh, how many, what's the average investment return assumption that most general plans in Florida have? Well, if you go on there, you can find it. It's around 7.1. Very good. And the employee education sessions are those geared more towards trustees or? Yeah, well, I mean, I believe in all though you do them here. So I didn't I didn't feel that but we we have led education seminars for for members for the active members and even their retirees, they can join as well. We lead, we can lead an education session on the plan and show the value. I was thinking more what you said there was stuff online. Oh yeah, yeah. Yeah yeah this page has a bunch of different information. Yeah the published the published materials and the trendline are online and we can the this is just showing you that we can do employee education sessions. Are we planning any this year, Ronaldo? Yes. Well, I think we should approve the actuary report. Do we have a motion? We have a motion to approve the act or report. I second the motion. All in favor. Hi. Hi. Thank you. Thank you. Thank you. Thank you, Shelley. This is very important. And how long do we have to keep these? You have to... Okay, under your pillow. You need reading material for her. for meditative. I used to in my office. I don't know. And moving on to our pension attorneys report. Okay. Good afternoon everybody. We have a letter from our office in your meeting packet regarding a change to our retainer agreement, specifically with the processing of the disability applications. That's currently included in your retainer agreement, but we're proposing that we charge the processing of those applications at an hourly rate of 350. Right now, your current hourly rate in general in your retainer agreement is $300. And the last time that we had any fee increase in your retainer agreement was in 2015. So just given the amount of work that goes into processing the disability applications in terms of gathering all the medical records, the IME preparing the booklets, which are normally over 1,000 pages, has just really increased in volume. And we're finding that our office feels that it would be more appropriate to charge it at an hourly rate. And looking at your disability applications related to this plan, I see that we've handled several. I want to say about six or seven. The last one being in 2021. Is that correct? Is that what you see? Yeah. Yeah. Fortunately fortunately there haven't been too many. So we are bringing this proposed fee change before the board for your discussion and hopefully your approval. And you said the last one was in 2021. So only about, it's in 2015, only about six or seven. Yes, that's what I'm that sound right okay I'll hopefully won't have been in any increase of it and So the monthly retainer that we pay now is that stay in the same that stays the same Yes, the monthly retainer will stay the same it would just be if a disability application came before the board, it would just be at an hourly rate. And that is normally depending on the application could be, it's normally about six hours of work put into preparing the disability. But it can always be a little bit more complicated if it goes to a formal hearing. But that even does go to a formal hearing, the board would still be required to hire outside council anyway, which, you know, yeah, becomes a whole thing. Okay, I don't see a problem with it. No, no. Motion to approve the increase in the hourly rate for disability applications. Hey, thank you so much. Second. Fall in favor. Hi. Hi. Great. That's it for me today. Thank you. Yeah, thank you. And we're still pending, I'm sorry, I just want to think. We're still pending that change, right? Until we get another. Until we have another board number. A drop interest rate review. Yes, per your request in 2014, Laurie. We're required to put the four discussion on the first meeting of every year to see if we want to change a drop interest rate. It's currently at 3% I'm okay with leaving an at 3% anybody else would it be a difficulty for us to raise it to 3.5? Or? I don't know. Shall we have any input on that? So does the board have discretion on the drop? Yeah, just right. Yeah. As long as it's below the assumed rate of the thing, there shouldn't be an end material and actual impact on changing. Can I ask some questions about that? And I don't just just think and so, so, and I don't know anything about the drop. If the drop is invested in the plan. Yes. So any of the anything above the 3% that is made in a year goes to reduce the unfunded liability in the pension plan. Yes. And so if you were to raise it, what it does, what it can do. So let's say it's at 3% and we make, what's our assumption rate? 7 and a quarter? And we make 7 and a quarter. That 4 and a quarter percent goes to benefit the pension plan to reduce the unfunded part. If you raise the drop, so let's call it seven and a quarter, and we make seven and a quarter, it doesn't have an impact on the pension plan at all. If what happens if we make, so I'm assuming, so let's say we make 15% like we did last year. The difference, and so the drop today was three, so that difference goes to help the pension plan. If that's the case, then it would only be anything above seven and a quarter. So it reduces the amount that it helps fund the pension plan. Okay. Secondly, let's say we make zero percent in the pension plan. Right? We have to, that increases the unfunded liability for seven and a quarter for the pension and three for the drop. But if you raise it, it's gonna increase it it by that much more because we got to make that up too. I don't know what the answer is, but I want to say there is an impact. There's, I mean, having that 3%, that's a, you know, it's like a CD, but if you start raising it, it will, it could. It reduces the positive impact it has on the pension plan. Would that be fair to say? It does, but it's not as material. Because it's a smaller amount dollar. Because it's a smaller amount dollar and we are expecting to get a gain from... But that's where that's where that's where the actuality gets. We do receive a game from. But that's where that's where that's where the actuality gets. We do receive a game every year that the job is credited 3% and we are expected to receive 7.2. We're expected to have a game on that. and if we were to increase the job credit rate, that the expected thing would not be as lower. Okay. to have a deal on that. And if you were to increase the job currently, it would be expected being on that with a lower. OK. Thank you. So this is something else to think about. I mean, there are drops typically that also just get the rate of the plan, right? So now they just get whatever the rate of the plan is, so that there's no, it doesn't help or hurt it. It just is what it is. But there's not a guarantee. No, no, I, well, that's the thing. Right. Some of some drops and I have to zero. Some, some plans do have that. Even if overall funds do if it's a silly question, but does it make that much of a difference if it's a small drop because now our drop changed to three years and we barely have it we have like six or seven people in drops so that's why it's to wear at least again it's immaterial material I don't that you know we need a drop it impacts statement and let everybody know that but in terms of impact it does have some impact although it's pretty small. Okay. So the increase that really does, it's even to a 3.5 is in material basically. but it would benefit the recipient. Oh, I see. Oh, yeah. material basically. But it would benefit the recipient. How much are interest rates in the bank? 1.5% in which bank? Which bank? That's a good bank. 3.5% to the end of your job period. I mean, most high interest banks now, what, 3.54% at most, and then see the about 3% in the bottom. Yeah, we're in. I mean, the 30-year bond's at four. Okay. You know what I mean? So if that gives you an idea. Oh, where, where? Yeah. I mean, we do have, you know, remember that yield curve? It was very high for cash and it was only, so, you know, now it's kind of like this. So three years are probably, you know, like 3% do we have to do that? Somewhere in that ballpark. and for the record the police is either 4 4 and a half something. And police have 4 and a half something like that. Police have 4 and a half? Yeah. Yes. And 3.5. And so if we increased it, would it be for income for people going into the crop or already in the drought. Great question. I am not sure that the plant specifies, but I would imagine it would be anybody in the drop. Even if so if they came in, it would be applicable. So they would get the revised. Going right. It's not retroactive to when they enter job. It's from that point forward. So one of the subredent is at 2.5 going forward. They are brewing interest as the money is in there. Got you. Okay. Like a bank account. Okay. People say they don't want to go in the drop because of the rate. And so they're holding on until you know things change. Sure that the drop interest rate isn't stated in the plan document and we would have to do an ordinance to actually change it. Will we? If it stated in there, yes, to actually change it. Will we? If it's stated in there, yes. You would change it, not stated. By ordinance, which we would need a fourth member for. And my opinion, I should think we should put it at 3%. I'm sorry. I'm thinking more of increasing it. Oh, we have no choice. We don't have a choice. We have a little more for people. But at least we can propose it. Can't we? Whether or not it's... First, we have to verify whether or not it's in the... If it's in the... the plan dogs. And if it isn't, can three of us change it or we need that fourth person? If it isn't in your plan, yeah, the PDF of it you can search I think this is ever changed since I've been working here. The interest was credited at a fixed rate of 6.5% per annum through June 30th 2012 and then 3% thereafter. What was that 6.5? Previously. That's a big drop. So I'm not sure. That might have been bargained. Probably in the second 2013 when there was so much. There was so many change. So that you may. Oh, stated that the interest rate is 3% in the men. So we would have to do an ordinance amendment to change it. We need four people. Oh, so we can table that table one. Yes. And let's think about it a little bit more. Hopefully we have a fourth member to be able to speak more on it. And moving on to our Administrators report. Where are we at that? Any Mark with getting us another trustee? Yeah. I've been I spoke to him a few times. He has said he's gonna get me the fourth and fifth person. There's there are also other people in the background trying to get this going. Nothing yet. In a few months. I can't push him. I think it only just send follow ups or phone call or text. But that's the best I could do. So it's still a limbo. Otherwise, I think everybody's aware I moved over there. I'm back behind Old H.R. office where the audience used to be. So I'm back there. They kicked me out from across the street. So it was a free space, and they're renting it So I don't generate what a city. So they say, you're free over here. So they rented this space. So I'm back there. It's comfortable. As Juliet asked earlier, I got a workshop coming up. I'm thinking of doing one in June. I'll send out an email soon on that. And everything else is working smoothly. No issues whatsoever. June is when we have our next conference though. And the June. Yeah. And I've been going to July. Yeah. I think the last week or something. And when were you plan when in probably the first week or also? What's disability follow up at the last pension meeting in November, you guys, we spoke about disability because there's a section in the plan that acts that we periodically follow up on disability members. So that is why I added it to the agenda. And I did do some research and there's only one disability recipient that's currently not at the normal retirement age and I have followed up with that one person and he sent in a necessary medical related documents to confirm that he is disabled and good to go. So it's just one member that I now have to follow up with periodically and he has already sent an necessary document so we're good to go on that end. And everyone else has already reached. They have already reached an onerous time in AGS. Okay, the renewal of the fiduciary liability policy. Fortunately for us, the amount 12,45936 last year is the same as the expiring policy, which expires April 15th. So they don't want anything from us, fortunately, they just want the names of the five trustees. That's all they're asking for. They're only going to get three. They're only going to get three. I hope it's not an issue. I don't see it being an issue, right? So I shouldn't. Yeah, so I just need to send them the names of the three torsities and they'll renew automatically. That's it. Police plan, they require a lot of information. This, you guys are good to go because they want to make your issues throughout the years. Okay, do we have approval of the minutes for November 12th, 2024? Approval of minutes November 12th, 2024? Motion. Motion. Seconded. Are you still reading it? Yeah, I'm still looking at this. Second, You second? Yeah. Okay. I'm sorry, I'm lost there. We had a motion. We had a second. Yeah. Okay. I approve of the minutes. No, that invoices. Prove of invoices. Motion to accept the invoices. Second. Okay. All in favor. Hi. Hi. Do we have any updates to the calendar? Yes, unfortunately. So I apologize. When I was working on a calendar, the 2025 calendar last year in about October and November with Great Stone and Sugarman's Office. Two dates that were up for consideration, August 12th and August 5th. The decision was August 12th, but I don't know what was happening in my brain at that time. But I came to the meeting in November with August 5th and we approve August 5th. So I have seen spoken Sugarman's office and Greystone that I'm going to see if you guys are okay with changing it to August 12th. August 12th, yes. Yes, I apologize for that. Yes, just that one day. All other dates remain unchanged. So I just need a motion to amend that date. Motion for approval for August 12th for next meeting. Second. Okay, all in favor. Aye. Aye. Very good. Just because I'm aware. What are the other eight? I'm sorry, August 12th and sorry. May 27th, August 12th and, phew, November. I have to look at my calendar. May 27th, yeah. November, October, November. Fort. So our next scheduled meeting will be May 27th. 2 p.m. Let's call this meeting adjourned. Thank you very much. Thank you everyone. Thank you all. Thank you very much.