MIAMI SHORES POLICE - MINUTES MEETING-9-22-2020.edited1
MIAMI SHORES VILLAGE
POLICE OFFICERS’ RETIREMENT SYSTEM BOARD MEETING
The Miami Shores Village General Employee Pension Board and Police Retirement Board
jointly met on September 22, 2020, via web conference as follows: Please join my
meeting from your computer, tablet, or smartphone. https://global.gotomeeting.com/join/995836349
You can also dial in using your phone. United States (Toll Free): 1 877 309 2073 United States: +1
(646) 749-3129
Access Code: 602-395-333.
The Police Officer Pension Board meeting called to order at 8:23 A.M. The following
individuals were present for the meeting:
PRESENT: ABSENT:
Alice Burch, Chairwoman Shmueal Mauda, Trustee
John Bolton, Secretary Jonathan Meltz, Trustee
Christopher McDonald, Trustee
Also Present:
Dina Lerner & Melissa Moskovitz, Gabriel Roeder Smith (GRS), Adam Levinson, Klausner,
Kaufman Jensen & Levinson, Dave West, AndCo Consulting, Doug Falcon & Yolanda Shea,
FHA-TPA Benefit Administrators, Inc.
APPROVAL OF MINUTES
The Chairman asked if anyone had any questions regarding the meeting's minutes on June 15,
2020. There being no questions,
A motion made by Trustee McDonald seconded by Trustee Bolton to approve the
meeting's minutes held on June 15, 2020, motion passed unanimously passed.
PUBLIC COMMENTS
None
APPROVAL OF WARRANT - 2020-0017
The Chairman asked if there were any questions regarding Warrant 2020-0017 for $2,025.00.
There being no questions,
A motion made by Trustee Bolton seconded trustee McDonald to approve Warrant
2020-0017 in the amount of $2,025.00, motion passed unanimously.
RATIFY WARRANTS – 2020-0014-2020-0016
The Chairman asked the Board if they would like to ratify the warrants collectively or
individually. There being no objection to approving the contracts collectively, the following
motion was made,
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A motion made by Trustee Bolton seconded trustee McDonald to approve Warrant
2020-0014($6,010.00), Warrant 2020-0015($7,522.42), Warrant 2020-
0016($2,683.00) & Warrant 2020-0012($5,105.00) motion passed unanimously.
INVESTMENT REPORT
Mr. West advised that Board that before he discusses the investment results, he will be
making a rebalancing recommendation.
He discussed the Miami Shores Village Police Officers’ Pension Fund Investment
Performance Review Period Ending August 31, 2020.He emphasized the outperformance
of value stocks, which have reached positive historical results, in terms of the S&P 500
Index. He reported the fiscal year to date returns as positive.
Mr. West is recommending rebalancing by selling $1.4 M Wells Fargo Growth Fund Class
R6 and transfer the proceeds to the Integrity account; this action will keep allocations in
line with investment policy.
Trustee Bolton asked, since these results are as of 8/31/2020, how are they affected after
that. Mr. West responded in terms of the net, there is very little difference.
A motion made by Trustee Bolton seconded by Trustee McDonald to accept the
investment consultant's recommendation to rebalance the domestic equity policy
target, which would entail selling $1.4M Wells Fargo Growth and transferring all
proceeds to the Integrity Fixed Income motion, passed unanimously.
The next item Mr. West discussed was the Miami Shores Village Police Officers’ Pension
Fund Investment Performance Review Period Ending June 30th, 2020. He reported that
the June 30th returns were much lower than August returns.
The next item Mr. West discussed in detail where the proposed changes to Miami Shores
Village Police Officers' Pension Fund Investment Policy Statement. Following are the areas
where proposed changes were suggested to the Board:
II. Target Allocations –
III. Investment Performance Objectives
A. Total Portfolio Performance, #1
C. Broad Market Fixed Income Performance
D. Treasury Inflation Protection Securities (TIPS) Non-Core Fixed Income
E. Real Estate Performance
IV. Investment Guidelines
A. Authorized Investments, #1, #2 & #5
D. Absolute Restrictions, #2, #3 & #4
IX. Review And Amendments
Mr. West advised the Board that the Investment Policy Statement's proposed changes
were reviewed by Mr. Levinson. Mr. Levinson confirmed that he had reviewed the changes
and reminded the Board that this is a good time to ask any questions.
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The Chairman asked clarification of VI Compliance, letter A., where it states, "that No
withdrawal of assets, in whole or in part, shall be made from safekeeping except by an
authorized member of the Board or their designee.” Mr. Levinson, replied this stipulation
is for the investment consultant not to take such authority, however, an authorized
member of the Board constitute a Board approval.
Mr. West advised the Board that if adopted, the proposed investment policy statement
(“IPS”) would become effective September 1st. However, the document has to be posted
by the Village, and after 30 days, the document becomes effective as of September 1,
2020.
A motion made by Trustee Bolton seconded by Trustee McDonald to accept the
changes as recommended by the investment consultant to the Miami Shores
Village Police Officers' Pension Fund Investment Policy Statement effective
September 1, 2020, motion passed unanimously.
This concluded the investment report.
ATTORNEY REPORT
Mr. Levinson advised the Board that the Governor extended the Executive Order regarding
meetings via web conference. There is still no information on whether or not the
Governor will extend the web conference meetings past 9/30/2020. Should the Executive
Order not be extended, Mr. Levinson advised the Board that they only need three trustees
for a quorum. The Board may want to consider having three trustees present for the
meeting, and allow the remaining trustees attendance via web conference. He pointed
out for instance, that he travels outside the State to attend pension meetings. If the
Board feels more comfortable having him or other service providers participate via web
conference, the Board can make that request.
The Chairman asked the Trustees if they agreed to have the required number of Trustees
physically present and the remaining attend via web conference. Trustees expressed no
objection to this arrangement should the Governor not extend the Executive Order to a
meeting via web conference.
Mr. Levinson discussed the State contribution to the Police Plan. The most recent
contribution declined 3%, however long term trends have been favorable.
Mr. Levinson reported that his office produces memos throughout the year, and he is
relying on the administrator to distribute to the Trustees. One of the memos, in
particular, pertains to Police Officers amongst First Responders. An Act entitled
Safeguarding America's First Responders was signed into law. This law provides
presumptive line-of-duty death and disability benefits to qualifying police officers and
firefighters. For death and disability benefits, this law creates a general presumption that
a public safety officer who dies from COVID-19 or related complications, sustains a
personal injury in the life-of-duty. This supplemental benefit does not come from the
Board but is a federal benefit paid for by the government.
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Mr. Levinson reminded Trustees in light of Florida Sunshine provisions, to be cautious
when sending emails copied to other Trustees, to ensure discussions outside the meetings
do not take place.
The last item Mr. Levinson discussed was a reminder to all Trustees to complete Form 1.
This concluded the attorney’s report.
ADMINISTRATOR REPORT
Mr. Falcon advised the Board that he did not have any retirements or terminations of
employment to report.
Mr. Falcon in responding to earlier Trustee requests gave an overview of the allocation of
expenses for the actuary and reviewed the different amounts on a cash and on an accrual
basis.
Mr. Falcon discussed the proposed budget for 2021 and explained the specific margins by
category. He explained that if the budget is exceeded for some reason during the year,
the State requires an amendment to the budget. The Plan is still required to pay the
invoices above the budgeted amount.
A motion made by Trustee Bolton, seconded by Trustee McDonald to accept the Miami
Shores Village Police Officers Retirement Plan Budget as presented above motion passed
unanimously.
Trustee Bolton asked that the cycle regarding actuarial valuation be reviewed. He noted
the General Employee Plan has an actuarial valuation report every other year and wishes
further explanation of why the Police Plan has it every year. He also asked Mr. Falcon to
distribute a copy of the actuarial contract.
The Chairman asked Mr. Benton to explain the difference between the General Employee
Plan and the Police in terms of the frequency of valuation reports. Mr. Benton responded
that the Police Pension Plan differs from the General Employee Plan in that the Police
Department requires roughly three times the amount of contribution. The taxpayers are
currently putting $1.2 to 1.3 million a year in the police pension plan. Therefore, Mr.
Benton concluded that there was a value to having annual valuations as it would help
avoid large variances in required funding from year to year.
ACTUARY
Ms. Moskovitz advised the Board that there are two items to discuss with the Board. The
first topic was regarding the DROP interest crediting for a member upon the DROP exit.
The Plan says the member gets the interest through the date of distribution. In reality,
the investment result is not received until 30 days after the quarter has ended. Mr.
Falcon advised the Board that either the member can use the interest earned from the
prior quarter or wait for the quarter's interest, when they exit the DROP. If the member
wants to take out a portion of the money, perhaps issue 90% or 80% of the balance from
the previous quarter and then true up the remaining balance once the information is in.
Mr. Levinson advised the Board Section 18-107-(l) states the following:
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(l) The Board is authorized to adopt such rules and regulations as are necessary
to interpret, implement and administer the deferred retirement option plan
for sworn police personnel
(i) Except as otherwise provided in this section, the distribution of an
employee's deferred retirement option plan forsworn police personnel
account shall begin as soon as administratively practicable, following the
employee's termination of employment. An employee may, under such
procedures as the Board may prescribe, elect to defer distribution of the
deferred retirement option plan for sworn police personnel account until the
first day of any month coincident with or following the employee's separation
of village services provided. However, that distribution shall be made before
the date elected by the employee to the extent necessary to comply with the
Internal Revenue Code and regulations thereunder. Any amount in an
employee's deferred retirement option plan for sworn police personnel
account shall continue to be invested by the Board and shall be credited with
the net investment return on the pension fund until the balance of the
deferred retirement option plan for sworn police personnel account is fully
distributed to the employee or the employee's beneficiary.
Mr. Levinson advised the Board that reiterated that the ordinance states that any amount
in an employee's deferred retirement option plan for sworn police personnel account shall
continue to be invested by the Board and shall be credited with the net investment return
on the pension fund until the balance of the deferred retirement option plan for sworn
police personnel account is fully distributed to the employee or the employee's
beneficiary.
Mr. Levinson suggested the Board consider how other Boards are doing it and consider the
pros and Cons. Perhaps establishing the distribution of a percentage amount and then as
indicated to true-up.
Trustee Bolton asked if the interest discussed is a set interest rate or a calculation based
on the investment return as a whole. Ms. Moskovitz responded that his based on the
investment return as a whole and is credited quarterly.
The Chairman asked how common is it to do an 80/20% distribution; Ms. Moskovitz said
most plans do 80%/20% or 90%/10%. However, she feels 80%/20% is a more
conservative approach.
Ms. Moskovitz advised the Board that a procedure should be established to handle this
situation to avoid adverse selection depending on how the market is doing.
Mr. Levinson advised the Board that the FRS has a set interest rate. Having a fixed
interest rate allows the actuary to know precisely what they will get. If the Board wishes
to go with a flat rate, it may affect the Village negatively in the event the quality of return
for a specific quarter is negative. Then the Plan takes a hit paying a higher interest rate.
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Trustee McDonald asked if the retiree exiting the DROP could be paid the balance over
time. Ms. Moskovitz responded that the ordinance says the member should receive
interest through the date they receive their full distribution.
Trustee McDonald offered to put a procedure where a distribution is made based on the
last quarter and pay the remaining month with the investment return.
Mr. Levinson pointed out that paying the entire amount based on the final quarter balance
and having a negative investment return on the next quarter could negatively affect the
Plan. Doing a distribution leaving a holdback amount protects the Plan from negative
investment results.
A motion made by Trustee Bolton seconded by Trustee McDonald to allow
members who exit the DROP to receive a payout at the rate of 80% of the
balance based on their last quarter and then pay out the remaining balance once
the investment results are obtained for the following quarter motion passed
unanimously.
The next item Ms. Moskovitz discussed was the share plan having balances that require
allocation to the members and how the Board wishes those allocations be done. For
example, the ordinance does not specify who receives the shares allocation, such as
active members and retirees? How are the shares allocated? How is the share credited, is
it credited monthly, yearly, or is it credited at all?
Mr. Levinson suggested this subject matter be put on the next Agenda. The Chairman
asked the issue be placed in the next pension meeting agenda as it requires more time,
and more information.
ADJOURNMENT
There being no further business,
A motion made, seconded, and passed unanimously to adjourn the meeting at
10:36 A.M.
Approved: Meeting 10/27/2020