At the regularly scheduled meeting of the Fire and Police Pension Fund Board of Directors held on the 21st day of July 2016, President Craig Joel presided. The meeting was held at the Pension Office, 6009 John Douglass Drive, Chattanooga, TN 37421.
The meeting convened at 0907 hours with board members Craig Joel, Kelly Simmons, Phillip McClain, Charlie Thomason, Tommy Meeks, Less Lee and Vickie Haley. Attorney Bill Robinson was also present.
Motion by Phillip McClain and seconded by Kelly Simmons to approve the minutes of the July 7, 2016 meeting. Motion carried unanimously.
Attorney Bill Robinson updated the Board on the status of Dodd lawsuit.
Fire Captain Robert Dean Bates appeared before the Board to submit his application for job related disability.
Laurie Adams Temple of Wells Fargo appeared before the Board and provided the Board with an update of the activity on the Fund’s accounts.
Fire Battalion Chief Chris Willmore appeared before the Board and discussed the CFD’s pending adoption of the National Fire Protection Agency’s (NFPA) Standard 1582 on physical fitness for Firefighters. B/C Willmore stated that the Department’s policy on NFPA 1582 is now being reviewed by the City Attorney’s office and is expected to be implemented soon. B/C Willmore requested that the Fund develop a disability procedures document that could accompany the new CFD policy when it is finalized and distributed throughout the Department as the Fire Department understands that Standard 1582 is unrelated to the Board’s standards for determining whether a Firefighter has a job related disability and that a Firefighter’s inability to meet Standard 1582 requirements does not mean that Firefighter is eligible to receive a disability pension. The determination of disability is made solely at the discretion of the Board, using its disability guidelines and pertinent legislation. Kelly Simmons discussed some of the testing of the NFPA 1582 policy that has already been performed by the CFD and requested that B/C Willmore return to the Board with an update when the policy is finalized.
Motion by Phillip McClain and seconded by Charlie Thomason to approve the following membership items:
REMOVE FROM THE ROLLS:
Leah Mahoney, Surviving Spouse of retired Police Officer Dennis R. Mahoney, effect July 31, 2016, died July 10, 2016.
ADD TO THE ROLLS:
Master Police Officer John Rogers, Jr., retiring with 27 years of service, reduced to a 25-year pension rate with a 33-month DROP effective 08/01/2016; participation date of 10/21/1988, terminated 07/21/2016.
REFUND CONTRIBUTIONS:
Former Police Officer Mark Frazer, terminated 07/01/2016; participation date of 01/21/2011 (2-413)
Motion carried unanimously.
The Board reviewed the bills paid since the last meeting.
The Board reviewed and discussed the DROP cost-neutrality study performed by the Nyhart Company, an independent actuary. The study, conducted in accordance to the terms of Chattanooga City Code §2-424, indicates that the DROP as found in §2-423 is cost-neutral in each of a wide range of scenarios. Motion by Phillip McClain and seconded by Vickie Haley to accept the DROP Study and submit it to the Mayor and City Council. Motion carried unanimously.
After the Board discussion of the DROP, Phillip McClain noted that the Police Department is having difficulty retaining officers noting that it appears to him that millennials seem to be more interested in pay and other benefits that can be enjoyed immediately than they are in delayed benefits such as retirement. Mr. McClain stated in the near future, he would like to see a committee established to study what can be done to attract and retain Police Officers. Kelly Simmons stated that he feels the 25 years at age 55 or 30-year retirement for new hires is actually deterring quality applicants from applying for sworn positions. President Joel also added that the current DROP plan also no longer acts as incentive for Firefighters and Police Officers to extend their careers.
Frank Hamilton discussed that he had spoken with Cheryl Powell in City HR concerning the General Pension Plan’s Actuarially Assumed Rate of Return (AAR), which was lowered from 7.5% to 7.25% and that the GPP Board will consider lowering it again to 7.0% next year. Frank mentioned that the Board may want to consult its advisors on whether or not they would advise to lower the AAR for the F&P Pension Fund, which currently is 7.75%, the maximum allowed by State law, noting that lowering the AAR will require a greater contribution from the City. Less Lee stated that he feels the City Council wants to contribute more to the Fund and the Board should lower the AAR. Frank stated that the actuary recommends the minimum required City contribution (ADEC) for each year and if City Council wants to contribute more to the Fund, then they can do so regardless of the AAR. He added that any amount in addition to the ADEC is beneficial for the Fund. President Joel informed the Board that Daisy Madison has invited him, Less Lee and Vickie Haley to a meeting on July 27 to discuss the AAR of the F&P Pension.
Phillip McClain asked why Ms. Madison had asked Less Lee, the City Council’s appointee, to a meeting to discuss the AAR on behalf of the Board. President Joel stated that it was at the request of the Mayor. Mr. McClain asked Mr. Lee if he was comfortable discussing the AAR with Ms. Madison. Mr. Lee said “yes.” Mr. McClain responded that he is not comfortable with Mr. Lee representing the Board “in any matters” due to Mr. Lee’s “failure to obtain the required educational hours in any of the three [Plan] years” that he has been on the Board. The Board discussed the legal implications of Mr. Lee’s lack of and failure to obtain relevant education and steps to correct the breach of Board policy. Mr. Lee gave no indication that he plans correct the breach of policy stating that he does not have “time” to obtain the education. President Joel stated that he and Mr. Hamilton had met with the Council Chair, Moses Freeman and Councilman Jerry Mitchell regarding Mr. Lee’s education on July 7. Councilman Freeman had asked to have until the Board’s next meeting (August 4, 2016) to determine the action of the Council.
Motion by Phillip McClain and seconded by Kelly Simmons to adjourn at 1038 hours. Motion carried unanimously.
