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HomeMy WebLinkAbout2014-11-18 NEERB MINUTES, NONEMERGENCY EMPLOYEES RETIREMENT BOARD MEETING November 18, 2014 Chairperson Hagan called the regular meeting of the Englewood NonEmergency Employees Retirement Plan Board to order at 3:00 p.m. in the Public Works Conference Room of the Civic Center, 1000 Englewood Parkway, Englewood, Colorado. Members Present: Members Absent: Others Present: A quorum was present. Approval of Minutes Bradley Hagan, Chairperson, Employee Representative Frank Gryglewicz, Director of Finance and Administrative Services John Moore, Council Appointee (by phone) Mahendra Patel, Secretary, Employee Representative James Phelps, Council Appointee Jim Woodward, Council Appointee Steven Yates, Council Member (arrived at 3:05 p.m.) None Gordon Tewell, Innovest Portfolio Solutions Jerry Huggins, Innovest Portfolio Solutions (arrived at 3:10 p.m.) Joe Herm, Gabriel Roeder Smith and Company (GRS) ***** MR. WOODWARD MOVED TO APPROVE THE MINUTES OF THE AUGUST 12, 2014 REGULAR MEETING. MR. MOORE SECONDED. Ayes: Nays: Absent: The motion carried. Gryglewicz, Hagan, Moore, Patel, Phelps, Woodward None Yates Innovest Portfolio Solutions, LLC PIMCO Discussion Mr. Tewell reviewed the changes at PIM CO, the reasoning and the impact of Bill Gross leaving PIMCO. Mr. Gross is now with Janus Funds. Mr. Tewell met with PIMCO staff during a recent trip. The NERP did not use the PIMCO funds managed by Mr. Gross. Steven Yates arrived 3:05 p.m. Mr. Tewell said the new manager at PIMCO is Dan Ivasyn. Mr. Ivasyn is the PIMCO group CIO replacing Bill Gross as the main CIO. He has also joined the three person team who runs the fund NERP owns. Innovest is not recommending a change from the PIMCO Fund. Mr. Woodward inquired about PIMCO's returns and fund size. Mr. Tewell commented that Mr. Gross does not have a track record managing the type of fund offered by Janus. Innovest will continue to monitor the performance of PIM CO under Dan Ivasyn. Mr. Gryglewicz inquired about the asset shift from PIMCO. Mr. Tewell explained much of PIMCO's assets are in the Total Return Fund, not the fund used by NERP. Mr. Tewell explained that of the $50 billion that has flowed out of PIM CO only approximately $400 million went to Janus. Jerry Huggins arrived 3: 10 p.m. Pe,formance Evaluation Report Mr. Tewell presented the third quarter capital markets and market summary reports. Mr. Huggins reviewed strategic allocation for the Plan and the individual funds' performance for the third quarter. He also reviewed the manager's score card indicating areas of concern that are being closely monitored. Much of the concern is related to the PIMCO changes related to Bill Gross' departure. Mr. Huggins highlighted the funds share class review that provides the Board an indication if the Plan is utilizing the lowest cost share class or the lowest expense ratio fund or the lowest net expense ratio after the revenue sharing for the Plan. He explained the revenue sharing is used to pay the annual custodial expenses from Wells Fargo. lnnovest evaluates if it is in the Plan's best interest to consider any share class changes. The Thornburg shares appear to have a lower fee share class available. Mr. Huggins research the possibility of changing to the lower fees share class and recommended the change if appropriate. Gabriel Roeder Smith and Company Mr. Henn reminded the Board the Society of Actuaries is due to publish a new a mortality table. The table has been published; however Diane Hunt and Mr. Henn have not been able to evaluate the new table. The reports published with the table would indicate the possible cost impact of one to two percent increase in the cost assumptions liabilities of moving from the current RP- 2000 mortality table the new 2014 table. Mr. Henn reminded the Board there is no rush to make the change and most Boards consider the change of tables with the latest experience study and those are completed every five years. Mr. Moore commented that it may be a study to include with next evaluation. Mr. Henn stated it is not common for small plans to complete an experience study because there is not enough data to do a credible experience study. The Board will review the information available at the next meeting. Retirement Approvals and Notifications: a Consideration of Delayed Retirement Benefit for Eudelia Toledo b. Consideration of DROP Benefit Request Randy Pierce c. Consideration of DROP Benefit Request from James Tallent d. Notification of DROP Benefit Request from Thomas Cable e. Consideration of Regular Retirement Benefit for Larry Ballenger f. Consideration of Regular Retirement Benefit for Thomas Jerrell Black g. Notification of Regular Retirement Benefit Request for Kenneth Watts h. Consideration of Benefit for Bonnie Poole, Surviving Spouse of John Poole (deceased July 16, 2014) i. Death Notification of Betty Goosman, Retiree (October 6, 2014) MR. GRYGLEWICZ MOVED TO APPROVE THE ITEMS LISTED ON THE RETIREMENT APPROVALS AND NOTIFICATIONS. MR. PA TEL SECONDED. Ayes: Nays: Absent: The motion carried. Gryglewicz, Hagan, Moore, Patel, Phelps, Woodward, Yates None None The next Meeting Date is February 10, 2015 The Board discussed the February 10, 2015 meeting, agreeing to a 3:30 p.m. start time unless added agenda items require additional time. Member Choice Mr. Yates inquired about the Board's process to address the Plan's unfunded liability. Discussion followed regarding some of the history of the Board's efforts to fund the Plan through amortization adjustments and assumption changes. Mr. Yates asked if everything goes as planned, when it would be anticipated the Plan be fully funded. Mr. Henn's response was ten \...,,,) years from 2014. Mr. Moore further explained the tiered amortization schedule the Plan currently uses. Discussion followed explaining that the fully funded plan has enough assets for the current benefit accruals and will still contribute the normal cost resulting from typical changes of salaries, investment returns, additional years of service credits, or participants leaving the plan. The normal cost contribution is determined by the annual valuation report. NonEmergency Employees Retirement Board Meeting 2of3 Further discussion reviewed the past a mortization methods and the steps taken by th e Board to red uce th e unfunded liability. Additio nal d isc uss ion ens ued regard ing no rmal costs one the unfunded li ab ility ha s been reduced. Mr. Moore requested a review of the hist ory o f and past changes to the amortization met hodology . The in fo rma tion will be prese nted at th e nex t Board meeting. MR. PHELPS MOVED TO ADJO URN. MR. WOODWARD SECON DED . Ayes : Nays: Absent : The moti on carried. Gryg lew icz, Hagan, Moore, P atel , Ph e lp s, Woodward , Yates None None The Board adjourned at 4:06 p.m. Carol Wescoa1 Recording Sec retary 3 of3 NonEmergency Employees Retireme nt Boa rd Meeting