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03-12-2009 Special Meeting MIAMI SHORES VILLAGE GENERAL EMPLOYEE PENSION BOARD SPECIAL MEETING MARCH 12,2009 1. CALL TO ORDER A special meeting of the Miami Shores Village General Employee Pension Board was held on Thursday, March 12,2009 in the Conference Room of the Village Hall. The meeting was called to order at 8:30 A.M. 2. ROLL CALL In order for the record to reflect those present,the roll was called with the following members present: Present Mayor Herta Holly Mary Ross Agosta Tom Benton James McCoy Joseph Charles Angela Dorney Averill Dorsett Also Present: Lisa Keeley, Interim Plan Administrator/Recording Secretary Steve Cypen, Pension Plan Attorney Steve Plamquist, Pension Plan Actuary 3. APPROVAL OF PAYMENT WARRANT—General Employee Warrant No.2009—004 Mr.Benton moved for approval of payment warrant General Employee Warrant No.2009—004 as submitted. Ms. Dorsett seconded the motion which was passed unanimously. 4. Presentation on Impact of Future Investment Returns—Steve Palmquist,GRS . Mr. Palmquist briefly reviewed the plan's current asset smoothing method with an 8%assumed rate of return for a five year period. He explained how this calculation is used to calculate the Annual Required Contribution (ARC)that is necessary to keep the actuarial value of plan assets within 20%of market as required by IRS funding regulations. Current market conditions will have a tremendous impact on the plan's ARC due to two consecutive years of losses. Mr. Palmquist reviewed his report dated February 27, 2009 that provides four different economic scenarios and the impact future asset returns will have on the Annual Required Contribution. It was noted that "the calculations are based upon assumptions regarding future events,which may or may not materialize." In reviewing the reports, Mr. Palmquist noted that the cumulative impact of the asset loss on required contributions would increase as much as 25.35%of payroll over the current contribution rate in a worse case scenario. Trend history of the Bear and Bull market,recoveries and downturns respectively,was discussed and applied to today's market. Mr.Palmquist remarked that the plan had realized virtually no investment earnings since Fiscal Year 2000. While the plan earned some interest during that time, it lost more over that period. A � General Employee Pension Board March 12,2009 Page 2 Again,it was noted that one cannot predict the market or time the market. Mary Ross Agosta inquired as to a plan of action.Mr.Palmquist replied that the purpose of the presentation was to provide information in order for the Board to better plan for the future impact. While other municipalities are reducing benefits,freezing plans and/or allowing new hires to enter the Florida Retirement System or starting a defined contribution plan, there is no real cost savings immediately. Trends show an initial cost increase rather than costs savings when these changes are made. The likely choice is to"stay the course." 5. Discussion and possible action regarding pension plan status The Board did not want to take immediate action on this issue. Mr. Benton noted that the Investment Consultant from the Bogdahn Group, Bryan Bakardjiev would be providing recommendations at the next Board meeting to allow for possible flexibility in the Investment Policy Statement which will help the Investment Managers. Mr. Cypen noted that there is a current House Bill H.R. 710 that would allow public pension plans to participate in purchasing preferred stocks through a select group of banks with a rate of return at 8.5%the first year, with market adjustments each subsequent year for a minimum of a 3 year investment period. 6. ADJOURNMENT The March 12,2009 special meeting of the General Employee Pension Board was adjourned at 9:35 AM. Mayor Herta Holly,Chairperson Lisa Keeley,Recording Secretary General Employee Warrant - No. 2009 - 004 For payment from the Village Pension Fund for General Employees in the Village of Miami Shores,Florida. To Chair and Administrator,or such other officers,who from time to time are duly designated and authorized by the Board of Trustees of said Fund,to sign checks,drafts or orders for the payment of money;You are hereby authorized by the Board of Trustees of the Miami Shores Village Pension Fund for General Employees in Miami Shores Village to pay the amounts listed below for services rendered to the said Board of Trustees,and to pay the persons named below,hereby certified by the Board of Trustees as being on the Pension list of said Board by circulation of this warrant,pensions from 02/12/09 to 03/11/09 inclusive,or for the period of time opposite the name of said persons. Name(Pensions,Benefits,Services Provided or Obligations) Amount To be paid by Trustee: Authorize payment to Gabriel,Roeder,Smith&Company $ 5,167.00 Acutuarial Services through 02/28/09 Invoice#107632 Authorize reimbursement to Miami Shores Village for payment $ 14.59 to FedEx for Courier Services through 02/24/09 Invoice#9-100-28755 For information only: Ratify previously authorized payments to Holland&Knight LLP total costs not to exceed$25,000 Legal Counsel IRS Review 02/11/09 Invoice#2353460 $ 1,236.80 Dated this 12h da of March 2009 Approved b : Y � 1'p Y Herta Holly,Chairperson As Chair of the Board of Trustees Village Pension Fund for General Employees in the Village of Miami Shores,Florida