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MIAMI SHORES POLICE - MINUTES MEETING-9-24-2019rev-PART II1 MIAMI SHORES VILLAGE POLICE OFFICERS’ RETIREMENT SYSTEM BOARD MEETING PART II The Miami Shores Village Police Retirement Board after adjourning the first meeting, relocated to another conference room on Tuesday, September 24, 2019, at the C. Lawton McCall Community Center. The Police Officers Pension Board meeting resumed at 9:38 AM. The following individuals were present for the meeting: PRESENT: ABSENT: Alice Burch, Chairwoman Jonathan Meltz, Trustee John Bolton, Secretary Shmueal Mauda, Trustee Christopher McDonald, Trustee Also present were Pension Plan Administrators, Doug Falcon and Yolanda Shea FHA-TPA Benefit Administrators, Inc., Dina Lerner and Melissa Moskovitz, Gabriel Roeder Smith (GRS), Dave West, AndCo Consulting, and Pension Attorney Adam Levinson, Klausner Kaufman Jensen & Levinson. TRUSTEES PRESENT: TRUSTEES NOT PRESENT Alice Burch Jonathan Meltz John Bolton Christopher McDonald Shmueal Mauda Mr. Levinson advised the Board that the item on hand is pertaining DROP participants who exit the DROP and leave their money in the pension fund and the administrator will go in to more detail regarding this matter. ADMINISTRATOR REPORT Mr. Falcon distributed a copy of a memorandum from FHA-TPA dated September 24, 2019 regarding Final Disposition of DROP Accounts/Share Accounts. He advised the Board that there are two retirees who exited the DROP; these participants currently have balances in their account, the question before the Board is do we pay the interest through the date they stop employment or do we pay interest through the quarter in which they take the money out of the account. There are two officers that took their money after a quarter ended but stopped working prior to the quarter ending. What interest would be correct? We are used to paying on the date the member requests the money based on the prior quarter results. Ms. Moskovitz explained that they cannot prepare the DROP balances until she receives the investment results for that quarter which likely there is a lag of approximately one month. Mr. Levinson referred to the ordinance not getting in to detail regarding how the interest is paid. Ms. Moskovitz pointed out that historically they have been pro-rating the interest through their termination date. The Chairman asked the process be streamlined where actuarial costs are minimized. Mr. Levinson pointed out that 2 the ordinance states if the money is in the account, the money is invested and they get the interest on an annual basis. The Chairman asked if the ordinance could be amended to reflect this situation keeping it simple by stating what happens to the money in the DROP when the officer exits the DROP. Mr. Levinson agreed that for the next meeting he will work with the actuary the administrator and bring to the next meeting a suggestion to streamline the process. . He will present a range of options he asked the administrator to put on the agenda Discussion of DROP Investment Options. Mr. Falcon also on this memorandum referenced the Share Accounts and advised the Board that at the last meeting a question was posed about the effective date of the creation of the share account. Specifically, did a member have to be physically present at work on the date the CBA was executed? This was referred to the Village and the response from the City Staff and attorney is that they do have to be physically present to participate in the share accounts. The CBA uses the term “Effective upon ratification” for creation of the share plan. Mr. Falcon said he has discussed this matter with the only affected participant and expect that he will appeal the determination that would exclude him. The next item Mr. Falcon discussed was the Miami Shores Village Expense Budget FYE 2020. A motion made by Trustee Bolton seconded by Trustee McDonald to accept the Miami Shores Village Police Officers Budget FYE 2020 as presented above motion passed unanimously. ATTORNEY Attorney Levinson discussed the special fund for police officers “share” plan; he said the plan may already have the infrastructure of how the share plan works. He distributed a copy of the section from the collective bargaining agreement section 30.7 and Section 30.8 which states as follows: 30.7 - The Employer agrees to amend the current Police Officer’s Retirement Plan set forth in Sections 18-75, et seq., Miami Shores Village Code of Ordinances, to include a share plan for officers. Funding for the share plan will be handled through collective bargaining. 30.8 - Effective upon ratification, the one-time accumulated Chapter 185 reserve of approximately $277,263 will be divided equally between the Village and the bargaining unit. The unit share will be used to fund the share plan for the officers. This would require an ordinance. Mr. Levinson advised the Board that an alternative is to use a current ordinance found in the Village charter, under Sec. 18-109 – Special fund for police officers. He asked Ms. Moskovitz if she could go in to more detail as to the advantages and disadvantages of Sec. 18-109. Ms. Moskovitz referenced Section 18-109 letter (a) referring to credited service. She pointed out that if the decision is made to provide the shares for active and retirees as stipulated in the ordinance, it will be a difficult task as she would have to obtain credit service for retirees who have retired a long time 3 ago. If is revised to just include active members as of a certain date then would not present a problem. ACTUARY – Melissa Moskovitz & Dina Lerner – GRS Consulting Ms. Moskovitz presented the Miami Shores Village Police Officers’ Retirement System Actuarial Valuation Report as of October 1, 2018 Annual Employer Contribution is Determined by this Valuation for the Fiscal Year Ending September 30, 2020. After discussing in detail the valuation results she advised the Board that she recommends looking at the investment assumptions 7 ½% based on the calculations and looking at other investment consultants. Ms. Lerner advised the Board that most of the pension plans are reducing the investment assumption, they are recommending doing it sooner than later, she suggested 10 basis point increments. A motion made by Trustee McDonald seconded by Trustee Bolton to accept the Miami Shores Village Police Officers’ Retirement System Actuarial Valuation Report as of October 1, 2018 Annual Employer Contribution is Determined by this Valuation for the Fiscal Year Ending September 30, 2020 motion passed unanimously Ms. Moskovitz advised the Board that the next valuation report she would present a side-by-side comparison illustrating the results with various lower assumed rate of return. The Chairman suggested lowering the assumption rate at this time due to the favorable results indicated by Mr. West. Trustees agreed for next year’s valuation to reduce the assumed rate of return by 10 basis point A motion made by Trustee Bolton seconded by Trustee McDonald to reduce the assumed rate of return by 10 basis point as stated above motion passed unanimously. A motion made By Trustee Bolton seconded by Trustee Mauda to adjourn the meeting at 10:59 a.m. Approved: Minutes approved at the 2/10/2020 meeting.