CIVILIAN AND POLICE PENSION BOARDS
The Civilian and Police Pension Boards met on February 20, 2007 at 9:05 a.m. with Chairman Ruane presiding (Chairman Mullaney was absent). Members present were Mr. DePrima (departed at 9:58 p.m. and arrived at 10:48 a.m.), Mrs. Mitchell, Ret. Lt. Knotts (departed at 10:18 p.m.), Mrs. Braun, Mrs. Rigby, Mr. Lucas. Members absent were Mr. Hogan, Ret. Capt. Gray, and Chief Horvath.
AGENDA ADDITIONS/DELETIONS
Mrs. Rigby moved for approval of the agenda, seconded by Mrs. Braun and unanimously carried.
Adoption of Minutes - August 29, 2006
Mr. DePrima moved for approval of the Minutes of the August 29, 2006 Civilian and Police Pension Boards meeting, seconded by Mrs. Rigby and unanimously carried.
Actuary Reports - Presented by Al Pike of Pike Associates
Mr. Al Pike of Pike Associates reviewed the Actuarial Valuations as of July 1, 2006 for the General Employee and Police Pension Plans.
Referring to the General Employee Pension Plan, Mr. Pike stated that the 2006 City normal costs are $321,689 (representing 4.23% of payroll) and that a contribution in the amount of $1,909,905 (representing 25.09% of payroll) is necessary to amortize the unfunded actuarial accrued liability over 18 years with payments increasing at 3½% per year, for a total recommended City contribution of $2,231,594 (representing 29.32% of payroll). The City costs reflect a $25,930,921 unfunded actuarial liability as of July 1, 2006, which has been amortized over 18 years with payments increasing 3½% each year.
Mr. Pike indicated that this is the second year in a row that the number of participants has increased in the General Employee Pension Plan. Responding to Mr. DePrima, Mr. Pike stated that reopening the General Employee Pension Plan to allow employees to transfer from other plans would inevitably cost the City more money. He suggested that an employee could keep any funds invested in the Deferred Plan and be given the option of joining the General Employee Pension Plan.
Referring to the Police Pension Plan, Mr. Pike stated that a City contribution, in the amount of $485,055, is necessary to provide for normal cost plus amortize the unfunded accrued liability over 18 years. The City costs reflect a $5,061,047 unfunded actuarial liability as of July 1, 2006, which has been amortized over 18 years with $485,055 annual payments. He explained that the costs are determined for the pension benefits payable to the closed group with no remaining active police officer hired prior to September 1, 1982 and 47 current pensioners and beneficiaries receiving benefits under the Plan. Mr. Pike indicated that the City costs may be reduced by Delaware insurance tax proceeds received from the State.
Mr. DePrima moved for acceptance of the Actuary Reports for the City of Dover General Employee Pension Plan as presented, seconded by Mr. Lucas and unanimously carried.
No action was taken on the Actuary Reports for the City of Dover Police Pension Plan due to the lack of a quorum.
Quarterly Performance - Presented by Michael Shone of Peirce Park Group
Mr. Shone of Peirce Park Group reviewed the Quarterly Investment Performance Analysis, as of December 31, 2006. He also provided members with the draft version of the Investment Policy Statements for both the Employee Pension (Attachment #1) and Civilian Pension Plans (Attachment #2). Mr. Shone explained the various investment strategies and reviewed the Performance Summary for the General Employee Fund, as follows:
GENERAL EMPLOYEE FUND
TOTAL FUND POLICY INDEX
Quarter Return 6.4% 5.4%
1 Year Return 14.9% 13.1%
3 Years Return 10.0% 8.9%
5 Years Return 5.2% 6.6%
Total Assets $17,235,393
Mr. Shone indicated that the reallocation for both the Police and Employee Pension Plans have been completed.
Due to the lack of a quorum, the Quarterly Performance Review of the Police Pension Fund was deferred until the next meeting.
Responding to Mr. Ruane, Mr. Shone stated that a report reflecting the asset increase for the past year will be provided to the Finance Department.
Discussion - Setting Future Quarterly Performance Review Dates
Mr. Ruane stated that the dates chosen for future Quarterly Performance Reviews were May 8, 2007, August 14, 2007, and November 13, 2007, all with 1:00 p.m. meeting times.
Mr. Lucas moved to set the future Quarterly Performance Reviews for the remainder of the year as follows: at 1:00 p.m. on May 8, 2007; August 14, 2007; and November 13, 2007. The motion was seconded by Mrs. Mitchell and unanimously carried.
Mr. Ruane suggested that Policy Statement Revisions and Allocation of the Vanguard Equity Assets be added to the May 8, 2007 agenda for discussion.
Investments 101- Presented by Michael Shone of Peirce Park Group
During their meeting of August 29, 2006, Mr. Shone provided members with a detailed presentation to be used as a re-education tool regarding the definitions of investment terms. It was the consensus of members to table the balance of this presentation until the next meeting due to time constraints.
Mr. Ruane moved to remove the matter from the table, seconded by Mr. Lucas and unanimously carried.
Mr. Shone provided members with a detailed presentation which would be used as a re-education tool regarding the definitions of investment terms.
Mr. DePrima moved for acceptance of the Investment 101 as presented, seconded by Mr. Lucas and unanimously carried.
Mrs. Mitchell moved for adjournment, seconded by Mr. DePrima and unanimously carried.
Meeting Adjourned at 11:09 A.M.
Respectfully submitted,
Eugene Ruane
Chairman - Civilian Pension Board
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