G E N E R A L M
A N A G E R ' S R E P O R T
July 29, 2005
TO: Board
of Directors, PBCSD
FROM: Richard
Andrews, General Manager
SUBJECT: Appointment of Employee Pension
Plans Trustee \
Investment
Committee Member
_________________________________________________________________________
It
is recommended the Board appoint one of its members or another person who is
not a District staff member to serve as a Trustee of the PBCSD Defined Benefit
Pension Plan, the Supplemental Pension Plan and, ex-officio, to serve as a
member of the Supplemental Pension Plan Investment Committee.
SUMMARY OF ISSUES
David R. Hendrick, who has
been serving as an “outside” Trustee of PBCSD’s pension plans, has submitted
his resignation from that position due to reasons of poor health. In the past, either two PBCSD directors were
designated to serve as “inside” trustees for both pension plans and as members
of the Investment Committee or, when someone exceptionally well qualified from
the community was available, the Board has appointed that person as an “outside”
Trustee and retained one “inside” Trustee position to be filled by a PBCSD
Director. Two PBCSD employees, the General Manager and the Finance Officer,
also serve on the Investment Committee.
While the District has discontinued its Defined
Benefit Pension Plan in lieu of participation in the State Employees Retirement
System, it continues to be responsible for administering and investing the
accrued assets of the Defined Benefits Pension Plan that will be distributed
over time to existing employees when they retire or terminate their employment
with the District. The Supplemental
Employee Pension Plan was established in-lieu of participation in the federal
social security system, and will continue to be in effect for all new employees
in the future as well as current employees.
Under the Supplemental Pension Plan, which is financed from employer and
employee contributions equivalent to Social Security, employees may place their
accumulated employer contributions (net of the premiums for long-term
disability, life insurance and Medicare) under the purview of the PBCSD
Investment Committee. Alternatively,
they may leave all of their funds with the pension plan administrator, ING
Financial, and designate investments from a family of mutual funds offered by
ING. Currently, 6 of the District’s 12
regular employees and one separated employee are participating in the
Investment Committee’s investment portfolio.
The Investment Committee meets monthly and may occasionally hold a
special meeting. Trustee business
regarding both the Defined Benefit Pension Plan and the Supplemental Pension
Plan is usually scheduled concurrently with Investment Committee meetings.
Director Laska is the District’s current inside
trustee/investment committee member, and also serves as the designated trustee
for the PBCSD Employee Defined Benefit Pension Plan that is fully funded by the
District and administered by ING Financial.
Employees only participate in investment decisions related to the
Supplemental Pension Plan, and not the Defined Benefit Plan, which is fully
funded by the District. The Board’s two
director trustees make all decisions regarding the Defined Benefit Pension
Plan, with input from the Plan Administrator, consulting actuarial and district
staff.
RA
Agenda no. 21-A