Board of Trustees of the Fire Pension Fund

Agenda Village of Arlington Heights Board of Trustees of the Firefighters Pension Fund Fire Station #2, Conference Room 1150 N. Arlington Heights Rd, 60004 August 14, 2023 9:00 AM I. CALL TO ORDER II. ROLL CALL III. APPROVAL OF MINUTES A. Approval of Minutes - May 8. 2023 IV. CLOSED SESSION V. TREASURER'S REPORT A. Financial Report - Q2, 2023 B. FF Pension Fund - Actuarial Valuation 2023 C. Annual Police & Fire Pension Compliance Report VI. PAYMENT OF BILLS A. Payment of Bills - Q2, 2023 VII.REPORTS A. FPIF - AH Pension Fund Summary as of May 2023 B. FPIF - Consolidated Fund as of May 2023 VIII.OLD BUSINESS A. Retirement Pension of FF William Essling - Update B. Annual Medical Evaluation Retired, Disabled FF Daniel Bennett - Update C. Application of Duty Disability Pension FF Steven Landt - Update Board Decision on Intervention Petition D. Funds in Former U.S. Bank Account IX. NEW BUSINESS A. Application for Membership - Jeffrey Jakalski hired July 5, 2023 B. Death of FF Phillip Palczynski on June 4, 2023 - Spousal Benefits  C. Refund of Pension Contributions - Former FF Bryan Gronset D. Retiree John Leligdon - Pension Conversion Request X. OTHER BUSINESS XI. PUBLIC COMMENTS XII.ADJOURNMENT Persons with disabilities requiring auxiliary aids or services, such as an American Sign Language interpreter or written materials in accessible formats, should contact Erin Mercado, at 33 S. Arlington Heights Road, Arlington Heights, Illinois 60005, emercado@vah.com or (847)368-5793.  Board of Trustees of the Firefighters Pension Fund 8/14/2023 Item: Minutes Department: Fire Approval of Minutes - May 8. 2023 ATTACHMENTS: Description Type Approval of Minutes - May 8, 2023 Minutes Regular Meeting  ARLINGTON HEIGHTS FIREFIGHTERS’ PENSION BOARD Minutes of the Regular Meeting held on May 8, 2023 Arlington Heights Fire Department Administrative Headquarters 1150 No. Arlington Heights Road – Arlington Heights IL 60004 Members in Attendance: Mark Aleckson Lance Harris Thomas Kuehne Adam Sielig Board Member Absent: Carl Brandon Others in Attendance: Thomas Radja, Board Attorney (Collins, Radja & Hartwell) Melissa Cayer, Public Observer Elizabeth Landt, Public Observer CALL TO ORDER Mark Aleckson called the meeting to order at 9:03 AM. Roll was called with board members Mark Aleckson, Lance Harris, Thomas Kuehne, and Adam Sielig present. Board Member Carl Brandon was absent. Also present were Thomas Radja, Board Attorney, Melissa Cayer, Public Observer; and Elizabeth Landt, Public Observer. Certify Trustee Election Results The recent election of a Trustee from the firefighter retired group resulted in Peter Ahlman receiving the most votes, thus winning the election. Due to a previously planned vacation, he was not able to attend today’s meeting. We need a motion to certify the election results. Motion was made and seconded (T. Kuehne/A. Sielig) to certify the election results and Peter Ahlman as Board Trustee. All in favor, motion passed. Board Nominations For the office of President of the Board, Mark Aleckson nominated Adam Sielig. A motion was made and seconded (T. Kuehne/L. Harris) to approve Adam Sielig as Board President. All in favor, motion passed. For the office of Secretary of the Board, Lance Harris nominated Peter Ahlman. A motion was made and seconded (L. Harris/M. Aleckson) to approve Peter Ahlman as Board Secretary. All in favor, motion passed. APPROVAL OF MINUTES Minutes from the Regular Board Meeting of February 27, 2023 were reviewed for approval. Firefighters’ Pension Board Meeting – May 8, 2023 – Page 1 of 7 A motion was made and seconded (L. Harris/M. Aleckson) to approve the minutes from the Regular Board meeting on February 27, 2023. All in favor, motion passed. Minutes from the Closed Session Meeting on February 27, 2023 were reviewed for approval. A motion was made and seconded (T. Kuehne/M. Aleckson) to approve the minutes from the Closed Executive Session meeting on February 27, 2023. All in favor, motion passed. PUBLIC COMMENTS None. CLOSED SESSION Attorney Tom Radja informed the Board that the Settlement Agreement was accepted and signed by retired firefighter Victor Tamosaitis. The agreement includes the details as discussed at the last meeting and all is in proper order. There is no need to go into Closed Executive Session. TREASURER’S REPORT Tom Kuehne distributed the Financial Report ending March 31, 2023, as well as the Projected Cash Flow report for 2023. The Financial Report indicates our total net assets to be approximately $130.4 million. We are now 25% through the calendar year and right on schedule as far as expenses, but will be a challenging year. Projected Cash Flow Next Tom Kuehne discussed the Cash Flow Projection. There are two areas to highlight. One is under the projected March 2023 column which identifies transfers from the Illinois Fund. A recommendation is to transfer $2.5 million in May from our checking account to the Illinois Fund to earn greater interest. This additional amount is partially due to receipt of property tax revenue, but primarily due to the $2 million transfer of surplus money from the Village’s General Fund to the Fire Pension Fund. Last year was tough and it was very beneficial to receive this surplus money. It continues to protect our long- term liability. The second recommendation is to move $1 million in August from the Illinois Fund back to our checking account, and thus have the funds needed to pay pension amounts. Motion was made and seconded (T. Kuehne/M. Aleckson) to transfer $2.5 million in May from checking to the Illinois Fund, and in August, transfer $1 million from the Illinois Fund to the checking account, as needed. Roll was called. Ayes: M. Aleckson, L. Harris, T. Kuehne, Adam Sielig Ayes – 4; Nays - 0. Motion carried. Trustees expressed their appreciation to both Tom Kuehne and the Village Board for being so forward- thinking. This is very significant to ensure the pension fund continues to remain strong and stable when it comes time for our members to retire. On several occasions the Village Board has approved Firefighters’ Pension Board Meeting – May 8, 2023 – Page 2 of 7 the transfer of funds into the Fire Pension Fund, and it’s important that our membership understands how grateful we are to have the ongoing support of the Village Board. As Adam Sielig was nominated today as Board President, he’s now a signer on bank accounts. Tom Kuehne suggested Mark and Adam meet with Mary Ellen Juarez to change authorizations at our banking accounts. PAYMENT OF BILLS The Check Register ending March 31, 2023 was reviewed and Tom Kuehne asked for approval of wire transfer #741 (journal voucher 004) through check #746 (journal voucher 011). Motion was made and seconded (T. Kuehne/M. Aleckson) to approve payments of wire transfer #741 (JV 004) through check #746 (JV 011). Roll was called. Ayes: M. Aleckson, L. Harris, T. Kuehne, Adam Sielig Ayes – 4; Nays - 0. Motion carried. REPORTS • Illinois Firefighters Pension Investment Fund (FPIF) Mark Aleckson distributed the March 2023 statement from FPIF, specifically the Arlington Heights pension fund portion. The Net Asset Value ended the year at $126,247,730, a nice improvement from the prior quarter with a YTD return of 5.09%. OLD BUSINESS • Retirement Pension of FF William Essling - Update Attorney Tom Radja stated the Circuit Court agreed with the Board’s decision to deny duty disability pension of retired firefighter William Essling. The order was entered on April 20, 2023 with a window to appeal of 35-days. If there is no further appeal, the Court’s decision will be final. If there is an appeal, Tom Radja will notify the Board. • Former Chief Andrew Larson – Decision & Order Document Prior to this meeting, Board members received a copy of the Decision & Order document for review. All back pay has been processed and now we require a motion to approve the Decision & Order document for former Fire Chief Andrew Larson. Motion was made and seconded (M. Aleckson/A. Sielig) to approve the Decision & Order document for former Fire Chief Andrew Larson. Roll was called. Firefighters’ Pension Board Meeting – May 8, 2023 – Page 3 of 7  Ayes: M. Aleckson, L. Harris, T. Kuehne, Adam Sielig Ayes – 4; Nays - 0. Motion carried. • Retirement Pension of FF Victor Tamosaitis – Settlement Agreement Tom Radja advised the Settlement Agreement as written has been accepted and signed by retired firefighter Victor Tamosaitis. Everything is in order and we now require a motion to approve the Settlement Agreement document. Motion was made and seconded (T. Kuehne/L. Harris) to approve the Settlement Agreement between retired firefighter Victor Tamosaitis and the Firefighters Pension Board. Roll was called. Ayes: M. Aleckson, L. Harris, T. Kuehne, Adam Sielig Ayes – 4; Nays - 0. Motion carried. • Annual Medical Evaluation Retired, Disabled FF Under Age 50 - Gregory O’Rourke update Gregory O’Rourke, retired disabled firefighter, was recently evaluated by Dr. Petrucci who certified that he continues to be disabled as a firefighter. Motion was made and seconded (A. Sielig/L. Harris) to approve the continuation of disability benefits for retired firefighter Gregory O’Rourke. Roll was called. Ayes: M. Aleckson, L. Harris, T. Kuehne, Adam Sielig Ayes – 4; Nays – 0. Motion carried. • Annual Medical Evaluation Retired, Disabled FF Under Age 50 – Daniel Bennett update Tom Radja recently sent a questionnaire form to the treating physician for retired FF Daniel Bennett. The evaluation will establish what medications Dan Bennett is currently taking, whether he is undergoing any treatments, is he currently employed, etc. The physician will then determine whether he continues to be disabled and has 30 days to return the completed form with a certification of his decision. Upon receipt, Tom will forward a copy to the Board and it will remain on the agenda for review at the next meeting. • Annual Confirmation – Retiree James Prickett update Mark Aleckson relayed that we now have the confirmed Retiree Form returned by James Prickett, and all is in order. • Updated Pension Board Forms Tom Radja hasn’t had an opportunity to complete new updated forms. If there is any form that’s needed soon, he will be happy to supply a copy. Likely he will have new forms available by the next board meeting. Firefighters’ Pension Board Meeting – May 8, 2023 – Page 4 of 7 NEW BSINESS • Application for Membership – Joshua Cardin hired March 31, 2023 All required documents have been signed and submitted by FF Joshua Cardin, newly hired as of March 31, 2023. Motion was made and seconded (M. Aleckson/A. Sielig) to accept FF Joshua Cardiin’s application for membership to the Firefighters Pension Fund. All in favor, motion carried. • Closed Executive Session – Release of Minutes Tom Radja recommends that we continue to keep minutes from Closed Executive Sessions as confidential and not for release. Motion was made and seconded (M. Aleckson/T. Kuehne) to keep Closed Executive Session minutes as confidential and refrain from releasing. All in favor, motion carried. • Application for Duty Disability Pension – FF Steven Landt Tom Radja has been working on getting all the proper documentation and medical records needed in order to begin the process of reviewing the application from FF Steven Landt for Duty Disability Pension. We are awaiting a few more records before we can proceed. He recently received a call from Steve Landt’s attorney, asking for a status update. There is the issue of intervention and there should not be any objection. Tom Radja will speak with the attorney and set appointments with IME’s as soon as possible. Chief Harris questioned a statement causing some confusion. FF Landt requested a 30-day extension of unpaid leave of absence, and in this he indicated “my expected return would be based upon approval of my duty disability pension or upon my full recovery to return to full duty as determined by my treating physician.” This seems if the Board does not grant Duty Disability, he may return to work. It’s unclear as to how this applies? Tom Radja explained that if the Pension Board learns that he is no longer disabled, then we must certify that he can return to work. If it’s determined that he is disabled, then the Board reviews his application in detail, whether Duty or Non-Duty pension, at the Disability Hearing. If the treating physician finds that he’s recovered from disability, then he has the potential to return to work. Chief Harris indicated granting a 30-day extension will allow FF Landt to continue to pay the employee portion of health insurance. His injury was on July 23, and to be consistent with past allowances, we can permit an extension up to July 23 which is one year from date of injury. • Firefighters Secondary Employer Reporting Tom Radja explained the pension code requires that if we have a full-time firefighter who also works with another fire department, that secondary FD must notify us at the end of the fiscal year of how many hours were worked and whether there were any incidents or injuries. Tom is willing Firefighters’ Pension Board Meeting – May 8, 2023 – Page 5 of 7  to create a standard letter when notifying secondary employers of the pension code and what’s required of them. Chief Harris next asked whether this secondary employment notification applies only to those who handle actual firefighter duties? We have one firefighter who works with another FD acting as their Public Education Coordinator, but is not handling regular firefighting duties. Tom Radja explained the written details of the pension code indicate this is related only to regular firefighting duties. Thus, no notification would be required in this instance. Although, if there was an injury to a non- firefighter secondary employee, we would still issue a subpoena to determine responsibility. • Funds in former U.S. Bank Account Previously we had 83 cents in our account and after several phone calls, this was finally sent to us and the account was down to zero. Recently there was a favorable class action lawsuit, resulting in almost $8,000 disbursement added to the account. Adam Sielig will work with Mary Ellen Juarez to confirm these funds and bring the U.S. Bank account to a zero close. OTHER BUSINESS Legal Office Tom Radja had previously sent an email to all his clients notifying them that one of their partners was charged with alleged criminal activity and there is now an on-going investigation. This was related to events over three years ago in Kane County, prior to joining their firm. Tom does not believe anything will come of it, but wanted the Board be aware of the situation as more may come out from the media. The Board expressed appreciation to Attorney Radja in his being so forthright as to what is transpiring. Admin – Pay Increase Laura Potts acts as the Administrative/Recording Secretary for the Pension Board and her last increase in hourly pay was made at the January 27, 2020 meeting, over three years ago. Her current rate is $38.50 and Chief Harris recommended an increase to $43.13 as a new hourly rate. Motion was made and seconded (L. Harris/M. Aleckson) to increase Laura Potts’ hourly rate to $43.13. Roll was called. Ayes: M. Aleckson, L. Harris, T. Kuehne, Adam Sielig Ayes – 4; Nays – 0. Motion carried. ADJOURNMENT As there was no other business to present before the Board, a motion was made and seconded (M. Aleckson/T. Kuehne) to adjourn the meeting. Meeting adjourned at 9:47 AM. All in favor, motion carried. NEXT REGULAR MEETING – Scheduled for Monday, August 14, 2023 at 9:00 AM Respectfully submitted, Firefighters’ Pension Board Meeting – May 8, 2023 – Page 6 of 7 ______________________ Laura Potts Recording Secretary ______________________ Peter Ahlman Board Secretary Firefighters’ Pension Board Meeting – May 8, 2023 – Page 7 of 7  Board of Trustees of the Firefighters Pension Fund 8/14/2023 Item: Treasuer Department: fire Financial Report - Q2, 2023 ATTACHMENTS: Description Type Financial Report - Q2, 2023 Report  CY 2023 BALANCE SHEET June 30, 2023 FIREFIGHTERS' PENSION FUND Arlington Heights YTD Firefighters' Pension Fund ASSETS ACTUAL June 2023 Financial Report Cash and Investments Cash and Equivalents 4,133,678 Pension Investments 125,999,106 Illinois Funds 2,117,104 132,249,888 Receivables Accrued Interest 0 Other 0 Due From Other Funds 0 TOTAL ASSETS 132,249,888 LIABILITIES Accounts Payable 15,024 Deferred Portability Payment 0 Due To Other Funds 0 TOTAL LIABILITIES 15,024 NET ASSETS 132,234,864 BUDGET COMPARISON REPORT CALENDAR YEAR 2023 June 30, 2023 FIREFIGHTERS' PENSION FUND 50% of the Calendar Year 2023 MTD MTD YTD YTD UNREALIZED PERCENT REVENUES BUDGET BUDGET ACTUAL BUDGET ACTUAL DOLLARS RECEIVED Interest on Investments 900,000 74,997 140,002 449,982 434,900 465,100 48% Market Value Adjustments 2,000,000 166,660 (1,795,002) 999,960 5,177,057 (3,177,057) 259% Dividend Income 500,000 41,665 86,614 249,990 346,479 153,521 69% Contributions - Participants 1,175,000 97,913 139,241 587,477 599,605 575,395 51% Contributions - R/E Tax 5,256,000 0 30,844 2,943,300 2,668,656 2,587,344 51% Portability Payments 0 0 0 0 0 0 N/A Other Income 0 0 0 0 9,079 (9,079) N/A TOTAL 9,831,000 381,235 (1,398,302) 5,230,709 9,235,776 595,224 94% 2023 MTD MTD YTD YTD AVAILABLE PERCENT EXPENDITURES BUDGET BUDGET ACTUAL BUDGET ACTUAL DOLLARS SPENT Service Pensions 6,191,800 515,963 497,252 3,095,776 2,983,513 3,208,287 48% Non-Duty Disability Pensions 88,900 7,408 7,409 44,448 51,367 37,533 58% Duty Disability Pensions 1,356,700 113,054 107,591 678,323 649,933 706,767 48% Surviving Spouse Pensions 1,123,900 93,655 93,655 561,928 561,931 561,969 50% Occupational Disease Pensions 187,200 15,599 24,590 93,596 159,694 27,506 85% Legal Services 50,000 4,167 0 24,999 28,610 21,390 57% Investment Manager Services 0 0 4,325 0 39,453 (39,453) N/A Investment Custodian 10,000 833 0 5,000 0 10,000 0% Bank Services 0 0 0 0 0 0 N/A Examinations 10,000 833 0 5,000 2,700 7,300 27% Other Services 9,700 808 0 4,850 1,444 8,256 15% Dues 1,300 108 0 650 0 1,300 0% Training 1,000 83 0 500 500 500 50% Postage 100 8 0 50 227 (127) 227% Publications/Periodicals 100 8 0 50 0 100 0% Office Supplies & Equip 100 8 0 50 256 (156) 256% Pension Refunds 25,000 2,083 0 12,500 0 25,000 0% Foreign Taxes Paid 0 0 0 0 0 0 N/A TOTAL 9,055,800 754,620 734,822 4,527,719 4,479,628 4,576,172 49% REVENUE OVER (UNDER) EXPENDITURES 775,200 (373,385) (2,133,124) 702,990 4,756,148 (3,980,948) 614% BEG. FUND BALANCE 127,478,716 127,478,716 ENDING FUND BALANCE 128,253,916 132,234,864  Board of Trustees of the Firefighters Pension Fund 8/14/2023 Item: Actuarial Department: Fire FF Pension Fund - Actuarial Valuation 2023 ATTACHMENTS: Description Type Pension Fund Actuarial Valuation 2023 Agreement Actuarial Valuation Village of Arlington Heights Arlington Heights Firefighters' Pension Fund As of January 1, 2023 For the Year Ending December 31, 2023  Table of Contents VALUATION SUMMARY Contributions.......................................................................................................................................... 1 Statutory Minimum Funding Cost Elements........................................................................................... 1 SECTION 1 Funding Policy Actuarially Determined Contribution Cost Elements..................................................... 2 Contribution to Avoid Negative Funding................................................................................................ 2 Financial Thumbnail Ratios..................................................................................................................... 2 Plan Maturity Measures......................................................................................................................... 3 Participant Data Summary...................................................................................................................... 3 VALUATION RESULTS SECTION 2 Significant Events, Risk Disclosures and Issues Influencing Valuation Results....................................... 4 Actuarial Certification............................................................................................................................. 7 FINANCIAL AND ACTUARIAL EXHIBITS Exhibit 1 - Statement of Market Assets Available for Benefits.............................................................. 8 Exhibit 2 - Statement of Changes in Net Assets Available for Benefits.................................................. 9 SECTION 3 Exhibit 3 - Determination of the Actuarial Value of Assets.................................................................... 10 Exhibit 4 - Determination of the Statutory Minimum Required Annual Contribution........................... 11 Exhibit 5 - Determination of the Funding Policy Annual Contribution................................................... 12 Exhibit 6 - Determination of the Contribution Required to Prevent Negative Funding......................... 12 Exhibit 7 - Summary of Participant Data as of January 1, 2023............................................................. 13 SUMMARY OF PRINCIPAL PLAN PROVISIONS Definitions............................................................................................................................................... 14 Pension (4-109)....................................................................................................................................... 14 Pension to Survivors (4-114)................................................................................................................... 16 SECTION 4 Disability Pension Line of Duty (4-110)................................................................................................... 16 Disability Pension Not on Duty (4-111).................................................................................................. 16 Disability Pension Occupational Disease (4-110.1)................................................................................ 17 Other Provisions...................................................................................................................................... 17 Glossary of Terms................................................................................................................................... 18 SUMMARY OF ACTUARIAL ASSUMPTIONS AND COST METHOD Nature of Actuarial Calculations............................................................................................................. 20 SECTION 5 Assumptions............................................................................................................................................ 20 Asset Valuation Methods........................................................................................................................ 21 Actuarial Cost Methods.......................................................................................................................... 21 TWENTY YEAR CASH FLOW PROJECTIONS SECTION 6 Twenty Year Cash Flow Projection......................................................................................................... 22  Section 1: Summary of Principal Valuation Results MWM Consulting Group was retained to prepare an actuarial valuation as of January 1, 2023 for the Arlington Heights Firefighters' Pension Fund. The purpose of the actuarial valuation was to determine the financial position and the annual actuarial requirements of the pension fund under Illinois statute 40 ILCS 5/4, Section 118, and to develop a recommended minimum contribution amount. For quick reference, some of the key results of the valuation, along with selected financial and demographic information for the year ending December 31, 2023 are summarized in this overview section along with (for comparison) the results from the prior year. CONTRIBUTIONS Current Prior Year Item Valuation Valuation The plan sponsor must contribute at as of 1/1/2023 as of 1/1/2022 least the statutorily required minimum contribution under Illinois statutes equal to the normal cost plus Contribution Required To Prevent Negative $5,400,541 (43.4%) $5,109,466 (42.1%) the amount necessary to amortize the Funding unfunded accrued liability such that by 2040, the liabilities will be 90% Actuarially Determined Funding Policy funded. $5,880,365 (47.3%) $5,255,147 (43.3%) Contribution Other contribution amounts are shown including Funding Policy Statutory Minimum Contribution per 40 Contribution and the contribution $4,529,912 (36.4%) $4,025,724 (33.2%) ILCS 5/4 Section 118 required to prevent negative funding. () amounts expressed as a percentage of payroll STATUTORY MINIMUM Current Prior Year FUNDING COST Item Valuation Valuation ELEMENTS as of 1/1/2023 as of 1/1/2022 Illinois statutes require employers to contribute at least the amount Accrued Liability $ 188,260,944 $ 179,617,561 necessary such that assets will equal at least 90% of the accrued liability by Market Value of Assets $ 127,478,716 $ 149,361,461 2040. The minimum amount is determined under the Projected Unit Actuarial (Smoothed) Value of Assets $ 147,835,727 $ 145,069,772 Credit funding method, with smoothed assets, and is equal to the Normal Cost (employer) $ 2,570,561 $ 2,584,012 normal cost plus the amortization amount. The absolute minimum Amortization Amount $ 1,598,547 $ 1,114,619 statutory contribution is determined and separately provided by the Statutory Minimum Contribution $ 4,529,912 $ 4,025,724 Pension Board. Page 1 Village of Arlington Heights Firefighters' Pension Fund Actuarial Valuation as of January 1, 2023  Current Prior Year FUNDING POLICY Item Valuation Valuation CONTRIBUTION COST as of 1/1/2023 as of 1/1/2022 ELEMENTS Accrued Liability $ 189,539,868 $ 179,441,272 The funding policy contribution Market Value of Assets $ 127,478,716 $ 149,361,461 amount is determined under the Entry Age Normal funding method, with Actuarial (Smoothed) Value of Assets $ 147,835,727 $ 145,069,772 smoothed assets, and is equal to the normal cost plus the amortization Normal Cost (employer) $ 2,347,655 $ 2,540,473 amount. 100% of the unfunded liability is amortized as a level percentage of Amortization Amount $ 3,086,515 $ 2,309,843 pay over 18 years on a closed basis. Actuarially Determined Funding Policy $ 5,880,365 $ 5,255,147 Contribution Current Prior Year FUNDING POLICY Valuation Valuation Item CONTRIBUTION as of 1/1/2023 as of 1/1/2022 AMOUNT REQUIRED TO AVOID NEGATIVE Accrued Liability $ 189,539,868 $ 179,441,272 FUNDING The funding policy contribution amortization amount is based upon a Market Value of Assets $ 127,478,716 $ 149,361,461 percentage of increasing payroll and, in the early years of funding, may not be sufficient to cover the interest cost Actuarial (Smoothed) Value of Assets $ 147,835,727 $ 145,069,772 on the unfunded liability. In order to avoid an increase in the unfunded liability (known as negative funding) , Normal Cost (employer) $ 2,347,655 $ 2,540,473 the minimum amortization amount must be adjusted to be at least equal to the interest on the unfunded Amortization Amount $ 2,815,030 $ 2,320,076 liability. The amount shown in the table as “Contribution to Avoid Amount of Contribution Needed to Negative Funding” provides for interest $ 5,400,541 $ 5,109,466 on 100% of the unfunded liability. Avoid Negative Funding FINANCIAL THUMBNAIL 1/1/2023 1/1/2022 Tests RATIOS Valuation Valuation This chart summarizes traditional financial ratios as applied to the Liquidity Ratio (based upon year ended) -153% 265% pension plan. This liquidity ratio relates the cash flow position of the Fund by Coverage Ratio (Market Value Assets) 67.26% 83.24% comparing the investment income plus employer and employee contributions Annual Benefit Payments (expected) $ 9,266,379 $ 8,513,453 to the annual benefit payments. Maintaining a ratio well above 100% prevents the liquidation of assets to Annual Contributions (expected) cover benefit payments. The increase in benefits paid over the years is Members $ 1,176,133 $ 1,147,187 generally a result of the maturing of the pension plan. Coverage of the Accrued Liabilities by Village $ 5,880,365 $ 5,255,147 the Assets is the Coverage Ratio and is one indication of the long term funding progress of the plan. Page 2 Village of Arlington Heights Firefighters' Pension Fund Actuarial Valuation as of January 1, 2023 PLAN MATURITY 1/1/2023 1/1/2022 Tests MEASURES Valuation Valuation This chart includes financial Ratio of Market Value of Assets to Active relationship measures which are Participant Payroll is a measure of 10.25 12.31 meant to help understand the risks volatility risk associated with asset losses associated with the plan. The ratio of Market Value of Assets to Ratio of Accrued Liability to Payroll is a Active Payroll is measure of volatility measure of volatility risk associated with 15.24 14.79 risk associated with asset losses. The changes in assumptions higher the ratio, the greater the volatility in contribution risks. Ratio of retired life Actuarial Accrued The Ratio of Accrued Liability to Payroll Liability to total Actuarial Accrued 0.59 0.58 is a measure of the volatility risk Liability associated with assumption or other changes in liabilities. The higher the ratio, the greater the volatility in Percentage of Contributions less Benefit -0.25% -1.29% contribution risks. Payments to Market Value of Assets The Ratio of retired life actuarial accrued liability to total actuarial accrued liability is a measure of the Ratio of Benefit Payments to 1.05 1.29 maturity of the Plan. A mature plan Contributions will have a ratio above 60%. The Support Ratio (Actives: Retirees). Support Ratio: Ratio of Active A number less than 1 indicates a more 0.95 0.95 mature plan. Participants to Retired Participants PARTICIPANT DATA Current Year Prior Year SUMMARY Item Valuation Valuation The Actuarial Valuation takes into as of 1/1/2023 as of 1/1/2022 account demographic and benefit information for active employees, Tier 1 Tier 2 Total Tier 1 Tier 2 Total vested former employees, and retired Active Members pensioners and beneficiaries. The Vested 72 7 79 75 4 79 statistics for the past two years are compared in the chart. Non-Vested 0 28 28 0 27 27 Total Active 72 35 107 75 31 106 Terminated entitled to future benefits 1 2 3 1 3 4 Retired 65 0 65 62 0 62 Surviving Spouse 19 0 19 20 0 20 Minor Dependent 1 0 1 2 0 2 Disabled 24 1 25 23 0 23 Total 182 38 220 183 34 217 Page 3 Village of Arlington Heights Firefighters' Pension Fund Actuarial Valuation as of January 1, 2023  SECTION 2: VALUATION RESULTS Significant Events, Disclosure Risks and Issues Influencing Valuation Results Actuarial valuations are snapshot calculations which incorporate and reflect the experience and events of the past year such as changes in the demographics of the plan participants, gains and losses in the plan assets, changes in actuarial assumptions about future experience and outside influences such as legislation. Some of the more significant issues affecting the Plan’s contribution level are described here. Asset Performance for yearend 12/31/2022 The approximate -14.76% return (not time weighted) on net assets was below the actuarial assumption of 6.75% in effect for the 2022 year. Historical Rates of Return 20.00% 15.11% 11.20% 11.52% 10.00% 6.75% 0.00% -3.40% -10.00% -14.76% -20.00% 2018 2019 2020 2021 2022 Rate of Return on Assets Assumed Rate of Return Change in Assumptions The mortality table was updated from the PubS-2010 base rates projected to the valuation date with scale MP2021 to the PubS-2010 base rates projected generationally with scale MP2021. Rates (probability of death at each age) have been adjusted by a factor of 1.081 for healthy male retirees, 1.178 for disabled male retirees, and 1.098 female surviving spouses. Retirement and withdrawal rates have been updated to reflect the rates recommended from the recent actuarial experience study completed for the Illinois Firefighters' Pension Investment Fund. Projected salary increases (graded by service) were updated from 13.25% initially to an ultimate rate of 4.25% to 12.50% initially to an ultimate rate of 4.00%. Payroll growth was reduced from 3.75% to 3.00%. Funded Status The funded ratio measurement presented in the Actuarial Valuation Report for the Fund is the ratio of the actuarial value of fund assets available for benefits compared to the actuarial accrued liability. By monitoring changes in the funding ratio each year, one can determine whether or not funding progress is being made. Please understand that: • The funded ratio measurement is inappropriate for assessing the sufficiency of plan assets to cover the estimated cost of settling the plan’s benefit obligations by transferring the obligations to a unrelated third party in an arm’s length market value type transaction, such as purchasing annuities from an insurance company. Page 4 Village of Arlington Heights Firefighters' Pension Fund Actuarial Valuation as of January 1, 2023  • The funded ratio measurement is dependent upon the actuarial cost method which, in combination with the plan’s amortization policy, affects the timing and amounts of future contributions. The amounts of future contributions will most certainly differ from those assumed in this report due to future actual experience differing from assumed experience based upon the actuarial assumptions. Attainment of a funded status measurement in the Actuarial Valuation of 90% or 100% is not synonymous with no required future annual contributions. Even if the funded status attained is 100%, the plan would still require future normal cost contributions (i.e., contributions to cover the annual cost of the active membership accruing an additional year of service credit). • The funded ratio measurement is a different result depending upon whether the market value of assets or the actuarial value of assets is used. Funded Percentages 90.00% 70.00% 50.00% 2019 2020 2021 2022 2023 Funded Ratios - Market Assets Funded Ratios - Smoothed Assets Employer Contributions The employer contribution is expected to be paid according to the Funding Policy, and exceeds the required Statutory Minimum contribution. An additional funding contribution amount is included which determines the amount necessary to prevent negative funding (also known as "treading water" funding). This year, the Funding Policy contribution exceeds the treading water funding contribution. This is because the percentage of payroll amortization (with interest to end of year) that is determined under the Funding Policy exceeds 6.75% of the unfunded liability. That is, the amortization under the Funding Policy covers interest on the unfunded liability and thus helps to reduce the unfunded. Assuming the Funding Policy contributions are received (and the actuarial assumptions are met) each year through 2040, the Fund’s funded ratio is projected to increase to 100% by 2040. If only the Statutory Minimum contributions are made, the Fund’s funded ratio would be projected to increase to 90% by 2040. However, the ability of the fund to reach 100% funding by 2040 is heavily dependent on the Village contributing the Funding Policy employer contribution each and every year until 2040. Actuarial standards do not require the actuary to evaluate the ability of the Village or other contributing entity to make such required contributions to the Fund when due. Such an evaluation is not within the actuary’s domain of expertise. Consequently, the actuary performed no such evaluation. The current Funding Policy amortizes the unfunded amount based upon a level percentage of payroll. This amortization method develops dollar amounts which increase as payroll increases. The dollar amounts towards the end of the closed amortization period are necessarily much larger, and if payroll does not increase as expected, the amortization amount can dramatically increase the contribution as a percentage of payroll. Page 5 Village of Arlington Heights Firefighters' Pension Fund Actuarial Valuation as of January 1, 2023 Pension Valuations and Risks Actuarial Standards of Practice (ASOP No. 51), states that the actuary should identify risks that, in the actuary’s professional judgment, may reasonably be anticipated to significantly affect future financial condition. Actuarial valuation results are developed based upon a single set of assumptions and a “snapshot” of the participant census and financial data as of the valuation date. The actuarial valuation represents an estimated forecast. The actual cost will be determined by the benefits and expenses paid, as they develop through the future experience of the participants and invested assets. There is a risk that emerging results may differ significantly as actual experience proves to be different from what is projected based on the current assumptions. MWM has not been engaged to perform a detailed analysis of the potential range of the impact of risks relative to the Fund’s future financial condition but included below is a description of some of the funding related risks that could significantly affect the Fund. • Investment Risk – Investment performance may create volatility in the funded status as well as future contributions. A gain or loss in asset value would directly affect the unfunded liability shortfall and funded status, either positively or negatively, depending upon whether the change is a gain or loss. • Longevity and Demographic Risk – Longevity and other demographic risks are the possibility that actual demographic experience differs from the actuarial assumptions. For example, if participants live longer than projected by the mortality assumption, it will create an actuarial experience loss and increase liability. Valuation Model MWM valuation results are developed using actuarial modeling software named “ProVal” which is licensed from Winklevoss Technologies. This software is widely considered to be the premier actuarial valuation software and is licensed by many of the largest actuarial firms. The actuarial valuation model generates a comprehensive set of liability and cost calculations that are presented to meet regulatory, legislative and client requirements. The actuarial team programs the assumptions and the plan provisions, validates the models, and reviews test lives and results. Page 6 Village of Arlington Heights Firefighters' Pension Fund Actuarial Valuation as of January 1, 2023 ACTUARIAL CERTIFICATION This is to certify that MWM Consulting Group has prepared an Actuarial Valuation of the Plan as of January 1, 2023 for the purposes of determining statutory contribution requirements for the Fund in accordance with the requirements of 40 ILCS 5/4, Section 118, of determining the funding policy contribution amount (the Actuarially Determined Contribution), under the assumptions detailed in this report. The absolute minimum statutory contribution is determined and separately provided by the Pension Board. The funding policy is selected by the Village. The contributions determined are net of contributions made by active members during the year. The results shown in this report have been calculated under the supervisions of a qualified Actuary as defined in appropriate State statutes. All results are based upon demographic data submitted by the Fund / Village, financial data submitted by the Fund, applications of actuarial assumptions, and generally accepted actuarial methods. This valuation report has been prepared at the request of Village of Arlington Heights to assist in administering the Plan and meeting specified financial and accounting requirements. This valuation report may not otherwise be copied or reproduced in any form without the consent of the Fund sponsor and may only be provided to other parties in its entirety. The information and valuation results shown in this report are prepared with reliance upon information and data provided to us, which we believe to the best of our knowledge to be complete and accurate and include: • Employee census data submitted by the Village of Arlington Heights. This data was not audited by us but appears to be consistent with prior information, and sufficient and reliable for purposes of this report. • Financial data submitted by the Village of Arlington Heights. The measurements shown in this actuarial valuation may not be applicable for other purposes. Actuarial valuations involve calculations that require assumptions about future events. Certain of the assumptions or methods are mandated for specific purposes. Future actuarial measurements may differ significantly from the current measurements presented in the report due to such factors as experience that deviates from the assumptions, changes in assumptions, increases or decreases expected as part of the natural operation of the methodology used for these measurements (such as the end of an amortization period, or additional cost or contributions based on the Plan’s funded status) and changes in plan provisions or applicable law. This report does not include an analysis of the potential range of such future measurements. We believe the assumptions and methods used are within the range of possible assumptions that are reasonable and appropriate for the purposes for which they have been used. In our opinion, all methods, assumptions and calculations are in accordance with requirements and the procedures followed and presentation of results are in conformity with generally accepted actuarial principles and practices. The undersigned actuaries meet the Qualification Standards of the American Academy of Actuaries to render the actuarial opinions contained herein. There is no relationship between the Village of Arlington Heights and MWM Consulting Group that impacts our objectivity. I certify that the results presented in this report are accurate and correct to the best of my knowledge. MWM CONSULTING GROUP 3/21/2023 Kathleen E. Manning, FSA, EA, FCA, MAAA Kyle Bang, FSA, EA, FCA, MAAA Date Managing Principal and Consulting Actuary Consulting Actuary Page 7 Village of Arlington Heights Firefighters' Pension Fund Actuarial Valuation as of January 1, 2023  SECTION 3 - FINANCIAL AND ACTUARIAL EXHIBITS Exhibit 1 - Statement of Market Value of Assets Plan Year Ending Item 12/31/2022 12/31/2021 1. Investments at Fair Value: a. Cash and Cash Equivalents $ 4,314,748 $ 3,752,387 b. Money Market Mutual Funds 0 0 c. Municipal Bonds 0 0 d. Corporate Bonds 0 0 e. US Government and Agency Bonds 0 0 f. Common and Preferred Stocks 0 3,617,704 g. Illinois Firefighters' Pension Investment Fund 120,136,304 0 h. Pension Investments 0 141,737,297 i. Accrued Interest and Receivables* 3,058,216 254,073 j. Other 0 0 k. Subtotal Assets (a + b + c + d + e + f + g + h + i + j) $ 127,509,268 $ 149,361,461 2. Liabilities: a. Expenses Payable $ 30,552 $ 0 b. Liability for benefits due and unpaid 0 0 c. Other Liabilities 0 0 d. Total Liabilities $ 30,552 $ 0 3. Net Market Value of Assets Available for Benefits: (1k – 2d) $ 127,478,716 $ 149,361,461 * Includes $2,000,000 transfer from General Fund at December 31, 2022. Page 8 Village of Arlington Heights Firefighters' Pension Fund Actuarial Valuation as of January 1, 2023  Exhibit 2 - Statement of Change in Net Assets Plan Year Ending Item 12/31/2022 12/31/2021 Additions Contributions Employer* $ 6,962,000 $ 4,913,000 Plan Member 1,168,906 1,145,403 Other 0 94,381 Total Contributions $ 8,130,906 $ 6,152,784 Investment Income Net realized and unrealized appreciation in fair value of investments $ (22,206,917) $ 12,551,814 Interest 905,769 2,692,346 Dividends 0 0 Other Income 0 0 Investment Expenses (74,280) (247,889) Net Investment Income (21,375,428) 14,996,271 Total additions $ (13,244,522) $ 21,149,055 Deductions Benefits $ 8,508,695 $ 7,913,187 Refunds 0 0 Administrative Expenses 129,528 73,219 Total deductions $ 8,638,223 $ 7,986,406 Total increase (decrease) $ (21,882,745) $ 13,162,649 Net Market Value of Assets Available for Benefits: Beginning of year $ 149,361,461 $ 136,198,812 End of year $ 127,478,716 $ 149,361,461 * Includes $2,000,000 transfer from General Fund at December 31, 2022. Page 9 Village of Arlington Heights Firefighters' Pension Fund Actuarial Valuation as of January 1, 2023  Exhibit 3 – Actuarial Value of Assets Under 40 ILCS 5/4, the statutory minimum required contribution is to be determined based upon Actuarial Value of Assets, which are asset values which have been smoothed over a three-year period, beginning with the year 2011. The Actuarial Value of Assets has been calculated below based upon the market value of assets at January 1, 2023 with adjustments for the preceding year’s gains/losses, which are reflected at the rate of 33- 1/3% per year. 1. Expected Return on Assets a. Actuarial Value of Assets as of Beginning of Year $ 145,069,772 b. Income and Disbursements During the year i. Contributions Received (weighted 50%) $ 4,065,453 ii. Benefit Payments and Expenses (weighted 50%) 4,319,112 iii. Weighted net income (other than investment income) (i) – (ii) (253,659) c. Actuarial Value adjusted for income and disbursements $ 144,816,113 d. Expected Return on Assets at assumed rate of 6.75% $ 9,775,088 2. Actual Return on Assets for year a. Market Value of Assets (Beginning of Year) $ 149,361,461 b. Income (less investment income) 8,130,906 c. Disbursements 8,638,223 d. Market Value of Assets (End of Year) 127,478,716 e. Actual Return on Assets (d) – (a) – (b) + (c) (21,375,428) f. Investment Gain/(Loss) for year 2(e) - 1(d) $ (31,150,516) 3. Actuarial Value of Assets a. Expected Actuarial Value of Assets as of End of Year $ 154,337,542 b. Deferred Investment gains/(losses) i. 1/3 of 2022 loss of $(31,150,516) (10,383,505) ii. 1/3 of 2021 gain of $6,209,980 2,069,993 iii. 1/3 of 2020 gain of $5,435,090 1,811,697 iv. Total (6,501,815) c. Actuarial Value of Assets as of December 31, 2022 3(a) + 3(b)(iv) $ 147,835,727 The chart below shows the comparison of smoothed to market assets over the past five years. Smoothed vs Market Assets $160,000,000 $150,000,000 $140,000,000 $130,000,000 $120,000,000 $110,000,000 $100,000,000 2019 2020 2021 2022 2023 Market Value of Assets Actuarial (Smoothed) Value of Assets Page 10 Village of Arlington Heights Firefighters' Pension Fund Actuarial Valuation as of January 1, 2023  Exhibit 4 - Determination of the Statutory Minimum Required Annual Contribution Under 40 ILCS 5/4, the statutory minimum required contribution is to be determined based upon the Projected Unit Credit actuarial funding method, where the unfunded liability is amortized such that 90% of the liability will be funded as of 2040. Under the statute, 90% of the unfunded liability is to be amortized as a level percentage of payroll over the period through 2040. The mandated funding method, the Projected Unit Credit funding method, requires the annual cost of the plan to be developed in two parts: that attributable to benefits allocated to the current year (the normal cost); and that allocated to benefits attributable to prior service (the accrued liability). In accordance with legislation enacted in 2020, the statutory minimum contribution for tax levy purposes as calculated and provided by the Pension Board will be the absolute minimum contribution amount. The calculation below is provided based upon the statutory requirments for the minimum and the assumptions summarized in Section 5 of this report. Funding Elements for 40 ILCS 5/4 Present Value of Projected Unit Credit PUC Actuarial Benefits as of (PUC) Normal Cost Accrued Liability as 1/1/2023 as of 1/1/2023 of 1/1/2023 1. Actives a) Normal & Early Retirement $ 94,503,543 $ 3,105,969 $ 68,739,009 b) Vested Withdrawal 2,087,457 118,133 1,330,983 c) Pre-Retirement Death 839,134 42,732 540,922 d) Disability 9,765,944 479,860 6,211,260 e) Total Actives $ 107,196,078 $ 3,746,694 $ 76,822,174 2. Inactives and Survivors a) Normal Retirees $ 78,245,851 $ 78,245,851 b) Widows (survivors) 9,930,884 9,930,884 c) Deferred Vested 61,183 61,183 d) Disabled 23,200,852 23,200,852 e) Total - Nonactive $ 111,438,770 $ 111,438,770 3. Total – All $ 218,634,848 $ 188,260,944 Minimum Statutory Contribution under 40 ILCS 5/4 Item Amount 1. Annual Payroll $ 12,439,265 2. Normal Cost (net of employee/member contributions) 2,570,561 3. Employee Contributions (expected) 1,176,133 4. Funding Actuarial Liability 188,260,944 5. 90% of Funding Actuarial Liability 169,434,850 6. Actuarial Value of Assets (Exhibit 3) 147,835,727 7. Unfunded Actuarial Balance 21,599,123 8. Amortization of Unfunded Balance over 18 years as a level percentage of payroll 1,598,547 9. Interest on (2), (3) and (8) 360,804 10. Minimum statutory tax levy contribution per 40 ILCS 5/4 – (2) + (8) + (9) $4,529,912 (36.4%) *() amount as a percent of payroll Page 11 Village of Arlington Heights Firefighters' Pension Fund Actuarial Valuation as of January 1, 2023  Exhibit 5 - Determination of the Funding Policy Annual Contribution The Tax Levy has been based upon the funding policy actuarially determined contribution, rather than the amount determined as the minimum under 40 ILCS 5/4. The funding policy contribution is developed below, based upon the Entry Age Normal Funding Method, with 100% of the unfunded accrued liability amortized as a level percentage of payroll amount over the 18 years through 2040. The contribution is then the sum of the Normal Cost (developed under the entry age method, but where the total normal cost is not less than 17.5% of Annual Payroll) plus the amortization payment. Funding Elements for Funding Policy Contribution Present Value of Entry Age Accrued Entry Age Normal Benefits as of Liability as of Cost as of 1/1/2023 1/1/2023 1/1/2023 1. Actives a) Normal & Early Retirement $ 94,503,543 $ 2,670,715 $ 73,122,081 b) Vested Withdrawal 2,087,457 203,396 272,906 c) Pre-Retirement Death 839,134 47,876 365,688 d) Disability 9,765,944 601,801 4,340,423 e) Total Actives $ 107,196,078 $ 3,523,788 $ 78,101,098 2. Inactives and Survivors a) Normal Retirees $ 78,245,851 $ 78,245,851 b) Widows (survivors) 9,930,884 9,930,884 c) Deferred Vested 61,183 61,183 d) Disabled 23,200,852 23,200,852 e) Total - Nonactive $ 111,438,770 $ 111,438,770 3. Total – All $ 218,634,848 $ 189,539,868 Actuarially Determined Funding Policy Contribution for Tax Levy Item Amount 1. Normal Cost (net of employee/member contributions) $ 2,347,655 2. Employee Contributions (expected) 1,176,133 3. Funding Actuarial Liability 189,539,868 4. 100% of Funding Actuarial Liability 189,539,868 5. Actuarial Value of Assets (Exhibit 3) 147,835,727 6. Unfunded Actuarial Balance 41,704,141 7. Amortization of Unfunded Balance over 18 years as a level percentage of payroll 3,086,515 8. Interest on (1), (2) and (7) 446,195 9. Actuarially Determined Funding Policy Contribution for Tax Levy (1) + (7) + (8) $5,880,365 (47.3%) Exhibit 6 - Contribution Required to Prevent Negative Funding Item Amount 1. Normal Cost (net of employee/member contributions) $ 2,347,655 2. Employee Contributions (expected) 1,176,133 3. 100% of Funding Actuarial Liability 189,539,868 4. Actuarial Value of Assets (Exhibit 3) 147,835,727 5. Unfunded Actuarial Balance 41,704,141 6. Interest on Unfunded Liability 2,815,030 7. Interest on (1), (2) 237,856 8. Contribution Necessary to Prevent Negative Funding (1) + (6) + (7) $5,400,541 (43.4%) Page 12 Village of Arlington Heights Firefighters' Pension Fund Actuarial Valuation as of January 1, 2023  Exhibit 7 – Summary of Participant Data as of January 1, 2023 Participant Data Item As of 1/1/2023 Tier 1 Tier 2 Total Active Members Vested 72 7 79 Non-Vested 0 28 28 Total Actives 72 35 107 Terminated Members entitled to future benefits 1 2 3 Retired Members 65 0 65 Surviving Spouses 19 0 19 Minor Dependents 1 0 1 Disabled Participants 24 1 25 Total 182 38 220 AGE AND SERVICE DISTRIBUTION AS OF JANUARY 1, 2023 Active Employee Participants Service Age Group Total 0-4 5-9 10 - 14 15 - 19 20 - 24 25 - 29 30 - 34 35 - 39 40+ Under 20 0 20 - 24 2 2 25 - 29 5 5 30 - 34 5 4 1 10 35 - 39 1 9 6 2 18 40 - 44 1 2 6 7 16 45 - 49 8 5 1 14 50 - 54 1 4 16 11 32 55 - 59 1 3 4 1 9 60 - 64 1 1 65 & Over 0 Total 15 15 14 21 24 16 1 1 0 107 Average Age: 44.7 years Average Length of Service: 16.1 years Page 13 Village of Arlington Heights Firefighters' Pension Fund Actuarial Valuation as of January 1, 2023  SECTION 4 - SUMMARY OF PRINCIPAL PLAN PROVISIONS This summary provides a general description of the major eligibility and benefit provisions of the pension fund upon which this valuation has been based. It is not intended to be, nor should it be interpreted as, a complete statement of all provisions Definitions Tier 1 – For Firefighters first entering Article 4 prior to January 1, 2011 Tier 2 – For Firefighters first entering Article 4 after December 31, 2010 Firefighter (4-106): Any person employed in the municipality's fire service as a firefighter, fire engineer, marine engineer, fire pilot, bomb technician or scuba diver. Creditable Service (4-108): Time served by a firefighter, excluding furloughs and leaves of absence in excess of 30 days, but including leaves of absence for illness or accident and periods of disability where no disability pension payments are received and also including up to 3 years during which disability payments have been received provided contributions are made. Creditable Service from other specified agencies is also included. Combined service credit option is available on a voluntary basis. Pension (4-109) Normal Pension Age Tier 1 - Age 50 with 20 or more years of creditable service. Tier 2 - Age 55 with 10 or more years of creditable service. Normal Pension Amount Tier 1 - 50% of the greater of the annual salary held in the year preceding retirement or the annual salary held on the last day of service, plus 2½% of such annual salary for service from 20 to 30 year (maximum 25%)]. Tier 2 - 2½% of Final Average salary for each year of service. Final Average Salary is based on the highest consecutive 48 months of the final 60 months of service. Early Retirement at age 50 with 10 or more years of service but with a penalty of ½% for each month prior to age 55. Annual Salary capped at $106,800 increased yearly by the lesser of the Consumer Price Index- Urban (CPI- U) or 3%. The Salary cap for valuations beginning in 2023 is $134,071. Minimum Monthly Benefit: $1,159.27 Maximum Benefit Percentage: 75% of salary Page 14 Village of Arlington Heights Firefighters' Pension Fund Actuarial Valuation as of January 1, 2023 Termination Retirement Pension Separation of service prior to meeting retirement eligibility after completion of at least 10 years of creditable service. Termination Pension Amount Tier 1 - Commencing at age 60 (or age 50 if at least 20 years of creditable service at termination), an amount equal to the monthly rate of compensation based on rank at separation multiplied by the applicable percentage below: Years of Applicable Credited Service Percentage 10 15.0% 11 17.6% 12 20.4% 13 23.4% 14 26.6% 15 30.0% 16 33.6% 17 37.4% 18 41.4% 19 45.6% For termination after at least 20 years of creditable service, 2½% of annual salary held on the last day of service times years of creditable service. Tier 2 - Commencing at age 55 (or age 50 but with a penalty of ½% for each month prior to age 55), 2½% of Final Average Salary for each year of service. Final Average Salary is based on the highest consecutive 48 months of the final 60 months of service. Pension Increase Non-Disabled Tier 1 - 3% increase of the original pension amount after attainment of age 55 for each year elapsed since retirement, followed by an additional 3% of the original pension amount on each January 1 thereafter. Effective July 1, 1993, 3% of the amount of pension payable at the time of the increase including increases previously granted, rather than 3% of the originally granted pension amount. Tier 2 - The lesser of ½ of the Consumer Price Index-Urban (CPI-U) or 3% increase of the original pension amount after attainment of age 60 and an additional such increase of the original pension amount on each January 1 thereafter. Disabled 3% increase of the original pension amount after attainment of age 60 for each year he or she received pension payments, followed by an additional 3% of the original pension amount on each January 1 thereafter. Page 15 Village of Arlington Heights Firefighters' Pension Fund Actuarial Valuation as of January 1, 2023 Pension to Survivors (4-114 ) Death Benefit Tier 1 - 54% of annual salary based on attained rank at date of separation of service to surviving spouse, plus 12% of such salary to dependent children under 18. Tier 2 - 66 2/3% of pension amount to surviving spouse (or dependent children), subject to the following increase: The lesser of ½ of the Consumer Price Index-Urban (CPI-U) or 3% increase of the original pension amount after attainment of age 60 and an additional such increase of the original pension amount on each January 1 thereafter. Tier 1 / Tier 2 - Greater of 100% of monthly retirement benefit or 54% of annual salary if completed 20 years of service or on disability retirement. Tier 1 / Tier 2 - 100% of annual salary if death occurs in the line of duty. Minimum Survivor Pension $1,159.27 per month. Disability Pension - Line of Duty (4-110) Eligibility Suspension or retirement from fire service due to sickness, accident or injury while on duty. Pension Greater of 65% of salary attached to rank at date of suspension or retirement and the retirement pension available. Minimum Benefit: $1,159.27 per month. Disability Pension - Not on Duty (4-111) Eligibility Suspension or retirement from fire service for any cause other than while on duty. Pension 50% of salary attached to rank at date of suspension or retirement. Page 16 Village of Arlington Heights Firefighters' Pension Fund Actuarial Valuation as of January 1, 2023 Disability Pension - Occupational Disease (4-110.1) Eligibility Suspension or retirement from service after 5 years of service from causes of heart disease, cancer, tuberculosis or other lung disease. Pension Greater of 65% of salary attached to rank at date of suspension or retirement and the retirement pension available. Minimum Benefit: $1,159.27 per month. Other Provisions Refund (4-116) At death with no survivors, contributions are returned to estate. At termination with less than 20 years of service, contributions are refunded upon request. Contributions by Firefighters (4-118.1) 9.455% of salary including longevity, but excluding overtime pay, holiday pay, bonus pay, merit pay or other cash benefit. Additional 1% of salary if combined service credit option is selected. Page 17 Village of Arlington Heights Firefighters' Pension Fund Actuarial Valuation as of January 1, 2023  GLOSSARY Actuarial Accrued Liability See Entry Age Normal Cost Method and Projected Unit Credit Cost Method. Actuarial Assumptions The economic and demographic predictions used to estimate the present value of the plan’s future obligations. They include estimates of investment earnings, salary increases, mortality, withdrawal and other related items. The Actuarial Assumptions are used in connection with the Actuarial Cost Method to allocate plan costs over the working lifetimes of plan participants. Actuarial Cost Method The method used to allocate the projected obligations of the plan over the working lifetimes of the plan participants. Also referred to as an Actuarial Funding Method. Actuarial Funding Method See Actuarial Cost Method Actuarial Gain (Loss) The excess of the actual Unfunded Actuarial Accrued Liability over the expected Unfunded Actuarial Accrued Liability represents an Actuarial Loss. If the expected Unfunded Actuarial Accrued Liability is greater, an Actuarial Gain has occurred. Actuarial Present Value The value of an amount or series of amounts payable or receivable at various times, determined as of a given date by the application of a particular set of Actuarial Assumptions . Actuarial Value of Assets The asset value derived by using the plan’s Asset Valuation Method. Asset Valuation Method A valuation method designed to smooth random fluctuations in asset values. The objective underlying the use of an asset valuation method is to provide for the long-term stability of employer contributions. Employee Retirement Income Security Act of 1974 (ERISA) The primary federal legislative act establishing funding, participation, vesting, benefit accrual, reporting, and disclosure standards for pension and welfare plans. Entry Age Normal Cost Method One of the standard actuarial funding methods in which the Present Value of Projected Plan Benefits of each individual included in the Actuarial Valuation is allocated on a level basis over the earnings of the individual between entry age and assumed exit age(s). The portion of this Actuarial Present Value allocated to a valuation year is called the Normal Cost . The portion of this Actuarial Present Value not provided for at a valuation date by the Actuarial Present Value of future Normal Costs is called the Actuarial Accrued Liability . Page 18 Village of Arlington Heights Firefighters' Pension Fund Actuarial Valuation as of January 1, 2023  GLOSSARY (Continued) Normal Cost The portion of the Present Value of Projected Plan Benefits that is allocated to a particular plan year by the Actuarial Cost Method . See Entry Age Normal Cost Method for a description of the Normal Cost under the Entry Age Normal Cost Method. See Projected Unit Credit Cost Method for a description of the Normal Cost under the Projected Unit Credit Cost Method. Present Value of Future Normal Costs The present value of future normal costs determined based on the Actuarial Cost Method for the plan. Under the Entry Age Normal Cost Method , this amount is equal to the excess of the Present Value of Projected Plan Benefits over the sum of the Actuarial Value of Assets and Unfunded Actuarial Accrued Liability. Present Value of Projected Plan Benefits The present value of future plan benefits reflecting projected credited service and salaries. The present value is determined based on the plan’s actuarial assumptions. Projected Unit Credit Cost Method One of the standard actuarial funding methods in which the Present Value of Projected Plan Benefits of each individual included in the Actuarial Valuation is allocated by a consistent formula to valuation years. The Actuarial Present Value allocated to a valuation year is called the Normal Cost . The Actuarial Present Value of benefits allocated to all periods prior to a valuation year is called the Actuarial Accrued Liability . Unfunded Actuarial Accrued Liability The excess of the Actuarial Accrued Liability over the Actuarial Value of Assets. Page 19 Village of Arlington Heights Firefighters' Pension Fund Actuarial Valuation as of January 1, 2023  SECTION 5 - SUMMARY OF ACTUARIAL ASSUMPTIONS AND COST METHODS Nature of Actuarial Calculations The results documented in this report are estimates based on data that may be imperfect and on assumptions about future events, some of which are mandated assumptions. Certain provisions may be approximated or deemed immaterial and therefore are not valued. Assumptions may be made about participant data or other factors. A range of results, different from those presented in this report could be considered reasonable. The numbers are not rounded, but this is for convenience and should not imply precisions, which is not inherent in actuarial calculations. Actuarial Annual Actuarial Valuation Annual Actuarial Valuation Assumption Statutory Minimum Funding Policy Amount for Tax Levy Interest 6.75% per annum 6.75% per annum Mortality PubS-2010 base rates projected generationally PubS-2010 base rates projected generationally with Scale MP2021. with Scale MP2021. Rates (probability of death at each age) have been Rates (probability of death at each age) have been adjusted by a factor of 1.081 for healthy male adjusted by a factor of 1.081 for healthy male retirees, 1.178 for disabled male retirees, and retirees, 1.178 for disabled male retirees, and 1.098 female surviving spouses. 1.098 female surviving spouses. Retirement Rates of retirement for all ages are: Rates of retirement for all ages are: Tier 1 Tier 1 Age Age Age Age 50 12.00% 61 25.00% 50 12.00% 61 25.00% 51 12.00% 62 25.00% 51 12.00% 62 25.00% 52 15.00% 63 33.00% 52 15.00% 63 33.00% 53 15.00% 64 33.00% 53 15.00% 64 33.00% 54 20.00% 65 100% 54 20.00% 65 100% 55 20.00% 66 100% 55 20.00% 66 100% 56 20.00% 67 100% 56 20.00% 67 100% 57 20.00% 68 100% 57 20.00% 68 100% 58 20.00% 69 100% 58 20.00% 69 100% 59 20.00% 70 100% 59 20.00% 70 100% 60 25.00% 60 25.00% Tier 2 Tier 2 Age Age Age Age 50 3.00% 61 25.00% 50 3.00% 61 25.00% 51 3.00% 62 25.00% 51 3.00% 62 25.00% 52 3.00% 63 33.00% 52 3.00% 63 33.00% 53 3.00% 64 33.00% 53 3.00% 64 33.00% 54 3.00% 65 100% 54 3.00% 65 100% 55 30.00% 66 100% 55 30.00% 66 100% 56 20.00% 67 100% 56 20.00% 67 100% 57 20.00% 68 100% 57 20.00% 68 100% 58 20.00% 69 100% 58 20.00% 69 100% 59 20.00% 70 100% 59 20.00% 70 100% 60 25.00% 60 25.00% Page 20 Village of Arlington Heights Firefighters' Pension Fund Actuarial Valuation as of January 1, 2023  Actuarial Annual Actuarial Valuation Annual Actuarial Valuation Assumption Statutory Minimum Funding Policy Amount for Tax Levy Rates of termination are based upon age only. Rates of termination are based upon age only. Withdrawal Sample rates for selected ages are: Sample rates for selected ages are: Age Age 25 9.00% 25 9.00% 40 1.20% 40 1.20% 50 1.00% 50 1.00% 55 1.00% 55 1.00% Rates of disability are based upon age only. Rates of disability are based upon age only. Disability Sample rates for selected ages are: Sample rates for selected ages are: Age Age 25 0.02% 25 0.02% 40 0.42% 40 0.42% 50 0.90% 50 0.90% 55 1.24% 55 1.24% 80% of disablities are assumed to occur in the line 80% of disablities are assumed to occur in the line of duty of duty Salary Increase Graded by service from 12.50% to ultimate of Graded by service from 12.50% to ultimate of 4.00%. 4.00%. Payroll Growth 3.00% per annum 3.00% per annum Percentage Married 80% are married, females are assumed to be 3 80% are married, females are assumed to be 3 years younger years younger Asset Valuation Assets are valued at fair market value and Assets are valued at fair market value and Method smoothed over three years, reflecting gains and smoothed over three years, reflecting gains and losses at 33-1/3% per year. losses at 33-1/3% per year. Actuarial Cost Projected Unit Credit Cost Method Entry Age Normal Cost Method Methods This is the mandated actuarial method to be used This method projects benefits from entry age to in determining the statutory contribution retirement age and attributes costs over total requirements and under PA 096-1495. This service, as a level percentage of pay. Amounts method determines the present value of projected attributable to past service have been amortized benefits and prorates the projected benefit by over 18 years on a closed basis as a level service to date to determine the accrued liability. percentage of pay. Amounts attributable to past service are amortized as a level percentage of pay with the goal of reaching 90% of the accrued liability by 2040. Page 21 Village of Arlington Heights Firefighters' Pension Fund Actuarial Valuation as of January 1, 2023  SECTION 6 - TWENTY YEAR CASH FLOW PROJECTION The information contained in the following charts are estimates only, intended to illustrate patterns of funding and cash flows rather than absolute values. These estimates are based upon the actuarial assumptions and funding methods outlined in the January 1, 2023 actuarial valuation report. The values are illustrated predicated upon a diversified portfolio according to the current investment policy and asset allocations. Any changes in the investment policy or asset allocation may affect the results and nullify the contribution patterns illustrated. Actual experience may differ significantly from that assumed and produce significantly different results than those presented in the charts. Many factors may change which affect results and therefore these projections should not be relied upon as other than estimates depicting trends. The projections are based upon an “open group” methodology which replaces active members expected to leave the group with hypothetical new employees with characteristics as assumed in the new entrant profile. Accrued Liability Employer Actuarial Excess of Fiscal Unfunded Annual Employer Contribution Employee Investment Total Benefit Value of Revenue over Year Current Future New Liabilty Payroll Contributions as a Percent of Contributions Income Revenue Payments Total Assets Payments Members Entrants Payroll 2023 189,539,868 - 189,539,868 147,835,727 41,704,141 12,439,265 5,880,365 47.27% 1,176,133 1,046,401 8,102,899 9,266,379 (1,163,480) 2024 196,482,741 - 196,482,741 146,672,247 49,810,494 12,781,514 6,653,027 52.05% 1,208,492 (1,486,553) 6,374,966 9,868,572 (3,493,606) 2025 203,119,238 151,601 203,270,839 143,178,641 60,092,198 13,170,222 7,689,493 58.39% 1,245,244 8,504,801 17,439,539 10,506,217 6,933,322 2026 209,377,969 479,496 209,857,465 150,111,963 59,745,502 13,618,453 7,886,739 57.91% 1,287,625 9,345,414 18,519,778 11,184,521 7,335,257 2027 215,198,196 1,001,749 216,199,945 157,447,220 58,752,725 14,116,272 8,059,541 57.09% 1,334,694 10,066,823 19,461,057 11,807,914 7,653,143 2028 220,603,558 1,742,910 222,346,468 165,100,363 57,246,105 14,673,313 8,219,768 56.02% 1,387,362 10,593,572 20,200,702 12,436,453 7,764,249 2029 225,563,604 2,722,552 228,286,156 172,864,612 55,421,544 15,262,000 8,382,784 54.93% 1,443,022 11,120,220 20,946,026 13,008,450 7,937,576 2030 230,099,715 3,972,127 234,071,842 180,802,189 53,269,653 15,913,417 8,550,630 53.73% 1,504,614 11,656,087 21,711,331 13,567,673 8,143,658 2031 234,200,908 5,505,068 239,705,976 188,945,846 50,760,130 16,561,564 8,742,042 52.79% 1,565,896 12,208,799 22,516,737 14,105,583 8,411,154 2032 237,893,044 7,336,485 245,229,529 197,357,000 47,872,529 17,208,660 8,936,061 51.93% 1,627,079 12,783,416 23,346,556 14,610,106 8,736,450 2033 241,193,106 9,470,988 250,664,094 206,093,450 44,570,644 17,840,266 9,134,394 51.20% 1,686,797 13,383,788 24,204,979 15,055,863 9,149,116 2034 244,145,997 11,919,890 256,065,887 215,242,566 40,823,321 18,443,446 9,339,832 50.64% 1,743,828 14,000,063 25,083,723 15,543,423 9,540,300 2035 246,685,518 14,709,913 261,395,431 224,782,866 36,612,565 18,997,260 9,527,865 50.15% 1,796,191 14,645,791 25,969,847 15,977,531 9,992,316 2036 248,808,823 17,865,692 266,674,515 234,775,181 31,899,334 19,554,048 9,723,712 49.73% 1,848,835 15,326,113 26,898,661 16,396,273 10,502,388 2037 250,520,301 21,405,931 271,926,232 245,277,569 26,648,663 20,110,774 9,926,312 49.36% 1,901,474 16,046,427 27,874,213 16,787,569 11,086,644 2038 251,842,682 25,350,293 277,192,975 256,364,213 20,828,762 20,668,557 10,120,076 48.96% 1,954,212 16,811,639 28,885,927 17,146,395 11,739,532 2039 252,795,908 29,715,364 282,511,272 268,103,745 14,407,527 21,238,421 10,289,571 48.45% 2,008,093 17,624,373 29,922,037 17,504,252 12,417,785 2040 253,372,020 34,520,231 287,892,251 280,521,530 7,370,721 21,816,737 10,357,576 47.48% 2,062,772 18,486,618 30,906,967 17,866,999 13,039,968 2041 253,556,985 39,786,303 293,343,288 293,561,498 - 22,393,998 2,515,644 11.23% 2,117,353 19,217,558 23,850,555 18,286,147 5,564,408 2042 253,267,987 45,540,362 298,808,349 299,125,906 - 22,969,052 2,541,914 11.07% 2,171,724 19,730,660 24,444,298 18,678,606 5,765,692 Page 22 Village of Arlington Heights Firefighters' Pension Fund Actuarial Valuation as of January 1, 2023  Board of Trustees of the Firefighters Pension Fund 8/14/2023 Item: Compliance Department: Fire Annual Police & Fire Pension Compliance Report ATTACHMENTS: Description Type Annual Pension Compliance Report 2023 Report  Board of Trustees of the Firefighters Pension Fund 8/14/2023 Item: Payment of Bills - Q2, 2023 Department: Fire Payment of Bills - Q2, 2023 ATTACHMENTS: Description Type Payment of Bills - 2Q, 223 Report  FIREFIGHTERS' PENSION FUND CALENDAR YEAR ENDING 12 / 31 / 2023 CHECK REGISTER AND JOURNAL VOUCHER PAYMENTS Check JV or Group MONTHLY Number Number Date Payee Description Expense TOTAL W/T 01-004 01/05/23 Collins Radja & Hartwell Legal Services 9,575.00 741 01-004 01/18/23 ExamWorks Medical Exams 7,050.00 742 01-004 01/31/23 1099 Pro LLC 1099 Services 185.44 16,810.44 W/T 02-204 02/22/23 Collins Radja & Hartwell Legal Services 6,401.75 743 02-204 02/27/23 Void 0.00 6,401.75 744 03-011 03/31/23 Kathleen Bono, CSR Court Reporting 632.90 745 03-011 03/31/23 IPPFA Harris Training 500.00 746 03-011 03/31/23 Collins Radja & Hartwell Legal Services 5,637.50 6,770.40 747 04-145 04/30/23 Summit Print Solutions Office Supplies 256.00 748 04-145 04/30/23 Petrucci Orthopedics Medical Exams 2,700.00 W/T 04-145 04/30/23 Collins Radja & Hartwell Legal Services 10,933.28 13,889.28 749 05-467 05/31/23 Laura Potts Secretarial Services 625.63 625.63 44,497.50  Board of Trustees of the Firefighters Pension Fund 8/14/2023 Item: FPFI - AH Department: Fire FPI F - AH Pension Fund Summary as of May 2023 ATTACHMENTS: Description Type AH Pension Fund Summary - May 2023 Report  Arlington Heights Firefighters Pension Fund Statement of Results Illinois Firefighters Pension Investment Fund Currency: USD ($) May 2023 2023 YTD Beginning NAVs: Beginning NAV 127,580,802.99 120,136,303.78 Contributions - - Withdrawals - - Net Time Weighted Activity - Allocation Balance 127,580,802.99 Allocation Percent 1.66% Income & Expenses: Unrealized Gain/Loss -1,788,574.28 8,177,100.07 Realized Gain/Loss -6,428.19 -3,021,396.30 Dividend Income 86,614.13 346,479.52 Interest Income 131,017.06 400,069.16 Other Income - 3.16 Total Income -1,577,371.28 5,902,255.61 Administrator Expenses (FPIF) - 10,408.59 Other Fee & Expenses (FPIF) 1,667.15 23,492.01 Other Expenses 449.23 882.21 Management Fee 2,209.00 4,670.25 Performance Fee - - Total Fee & Expenses 4,325.38 39,453.06 Net Income -1,581,696.66 5,862,802.55 Ending NAVs: Ending NAV 125,999,106.33 125,999,106.33 Rate of Returns: Return on Invested Capital -1.24% 4.88% Return on Total Assets -1.24% 4.88% Ownership 1.66% Disclaimer / Important Information: The Plan Total reflects the total of underlying plan balances, and may not be equal to the sum of displayed columns. Although this report has been prepared using information believed to be reliable, it may contain information provided by third parties or derived from third party information, and/or information that may have been obtained from, categorized or otherwise reported based upon client direction. The Northern Trust Company does not guarantee the accuracy, timeliness or completeness of any such information. The information included in this report is intended to assist clients with their financial reporting needs, but you must consult with your accountants, auditors and/or legal counsel to ensure your accounting and financial reporting complies with applicable laws, regulations and accounting guidance. The Northern Trust Company and its affiliates shall have no responsibility for the consequences of investment decisions made in reliance on information contained in this report. NTAC:3NS-20  Board of Trustees of the Firefighters Pension Fund 8/14/2023 Item: FPI F - Consolidated Department: Fire FPI F - Consolidated Fund as of May 2023 ATTACHMENTS: Description Type FPIF - Consolidated Pension Fund as of Report May 2023 Illinois Firefighters’ Pension Investment Fund Monthly Summary May 31, 2023 * Preliminary, subject to change Illinois Firefighters' Pension Annualized Performance (Net of Fees) Investment Fund Return Summary - 1 Month Total Return _ Total Fund Composite -1.2% IFPIF Policy Benchmark -1.2% Total Fund Composite excl. Member Funds -1.2% IFPIF Policy Benchmark -1.2% U.S. Equity Composite 0.3% Russell 3000 0.4% Non-U.S. Equity Composite -3.4% MSCI ACWI ex USA IMI -3.5% Total Fixed Income Composite -1.0% Bloomberg US Universal TR -1.0% Total Real Estate Composite -1.2% Real Estate Custom Benchmark -1.3% XXXXX Marquette Associates, Inc. 1 Total Fund Composite Asset Allocation Market Value: $7,609.3 Million and 100.0% of Fund Ending May 31, 2023 Asset Class Market Value % of Portfolio Policy % _ Total Fund Composite $7,609,253,851 100.0% 100.0% Total Fund Composite excl. Member Funds $7,609,253,851 100.0% 100.0% Total Equity Composite $4,942,793,642 65.0% 65.0% U.S. Equity Composite $2,727,029,709 35.8% 36.0% Rhumbline Russell 200 Large-Cap Core $1,941,546,445 25.5% 25.0% Rhumbline Russell Midcap Mid-Cap Core $644,445,512 8.5% 9.0% Rhumbline S&P 600 Small-Cap Core $141,037,752 1.9% 2.0% Non-U.S. Equity Composite $2,215,763,933 29.1% 29.0% International Developed Equity Composite $1,475,396,730 19.4% 19.0% SSGA World ex US Non-U.S. Large-Cap Core $1,257,840,253 16.5% 16.0% SSGA World ex US Small Non-U.S. Small-Cap Core $217,556,477 2.9% 3.0% Emerging Markets Equity Composite $740,367,204 9.7% 10.0% SSGA MSCI EM Emerging Markets $590,844,945 7.8% 8.0% SSGA EM Small EM Small-Cap $149,522,259 2.0% 2.0% Total Fixed Income Composite $2,216,394,140 29.1% 30.0% Rate Sensitive Composite $1,991,133,090 26.2% 27.0% Short-Term Treasury Composite $220,708,877 2.9% 3.0% SSGA Short Treasury Short-Term Govt. Fixed Income $220,708,877 2.9% 3.0% Core Fixed Income Composite $1,770,424,213 23.3% 24.0% Garcia Hamilton & Associates Core Fixed Income $880,729,386 11.6% 12.0% Brown Brothers Harriman & Co Core Plus Fixed Income $889,694,827 11.7% 12.0% Credit Fixed Income Composite $225,261,050 3.0% 3.0% Emerging Markets Debt Composite $225,261,050 3.0% 3.0% SSGA EM Global Diversified EM Fixed Income $225,261,050 3.0% 3.0% Total Real Estate Composite $356,129,172 4.7% 5.0% Core Real Estate Composite $356,129,172 4.7% 5.0% Public Real Estate Composite $122,041,287 1.6% 2.0% SSGA FTSE NAREIT U.S. REIT $122,041,287 1.6% 2.0% Private Real Estate Composite $234,087,885 3.1% 3.0% Principal USPA Fund Core Real Estate $234,087,885 3.1% 3.0% Cash Composite $93,887,941 1.2% 0.0% Transition Composite $48,956 0.0% 0.0% Member Funds Composite -- -- 0.0% XXXXX 2 Marquette Associates, Inc. Investment Manager Annualized Performance (Net of Fees) Market Value: $7,609.3 Million and 100.0% of Fund Ending May 31, 2023 Inception 1 Mo 3 Mo YTD 1 Yr 3 Yrs 5 Yrs 10 Yrs Inception Date _ Total Fund Composite -1.2 1.9 4.9 -0.8 -- -- -- -4.7 Oct-21 IFPIF Policy Benchmark -1.2 1.9 5.0 -0.5 6.5 5.3 6.4 -4.3 Oct-21 Total Fund Composite excl. Member Funds -1.2 1.9 4.9 -0.7 -- -- -- -5.9 Oct-21 IFPIF Policy Benchmark -1.2 1.9 5.0 -0.5 6.5 5.3 6.4 -6.4 Oct-21 Total Equity Composite -1.4 2.4 6.7 0.3 -- -- -- -7.2 Oct-21 MSCI ACWI IMI Net USD -1.2 2.5 7.0 0.3 10.0 6.3 7.7 -7.5 Oct-21 U.S. Equity Composite 0.3 4.0 8.6 1.7 -- -- -- -6.3 Oct-21 Russell 3000 0.4 4.2 8.7 2.0 12.2 10.1 11.5 -6.5 Oct-21 Rhumbline Russell 200 1.6 8.5 12.4 4.8 -- -- -- -4.4 Oct-21 Russell Top 200 1.6 8.5 12.4 4.9 13.2 12.0 12.7 -4.3 Oct-21 Rhumbline Russell Midcap -2.8 -4.8 0.6 -4.6 -- -- -- -10.8 Oct-21 Russell MidCap -2.8 -4.8 0.6 -4.5 10.2 6.9 9.3 -10.7 Oct-21 Rhumbline S&P 600 -1.7 -9.4 -2.0 -7.2 -- -- -- -10.5 Oct-21 S&P 600 SmallCap -1.8 -9.4 -2.0 -7.3 13.6 3.8 8.9 -10.5 Oct-21 Non-U.S. Equity Composite -3.4 0.5 4.6 -1.8 -- -- -- -8.4 Oct-21 MSCI ACWI ex USA IMI -3.5 0.2 4.6 -1.9 7.3 2.1 4.0 -8.6 Oct-21 International Developed Equity Composite -4.2 0.3 5.9 1.0 -- -- -- -6.4 Oct-21 MSCI World ex USA IMI NR USD -4.3 0.1 5.7 0.5 8.4 3.0 4.6 -6.8 Oct-21 SSGA World ex US -4.3 0.8 6.5 1.9 -- -- -- -5.3 Oct-21 MSCI World ex USA -4.4 0.5 6.2 1.5 8.8 3.4 4.5 -5.6 Oct-21 SSGA World ex US Small -4.0 -2.2 2.6 -4.7 -- -- -- -12.7 Oct-21 MSCI World ex USA Small Cap -4.2 -2.5 2.4 -5.2 6.0 0.9 5.2 -13.1 Oct-21 Emerging Markets Equity Composite -1.5 0.7 2.0 -7.4 -- -- -- -12.6 Oct-21 MSCI Emerging Markets IMI -1.3 0.5 1.7 -7.8 4.8 -0.3 2.1 -13.2 Oct-21 SSGA MSCI EM -2.1 0.2 1.0 -8.5 -- -- -- -13.9 Oct-21 MSCI Emerging Markets -1.7 0.2 1.1 -8.5 3.5 -0.7 1.9 -13.9 Oct-21 SSGA EM Small 0.9 2.7 5.9 -3.1 -- -- -- -7.9 Oct-21 MSCI Emerging Markets Small Cap 1.1 2.7 5.7 -3.0 15.3 2.6 3.2 -8.0 Oct-21 Total Fixed Income Composite -1.0 1.6 2.2 -2.0 -- -- -- -6.2 Oct-21 Bloomberg US Universal TR -1.0 1.9 2.5 -1.9 -3.1 1.0 1.6 -7.0 Oct-21 Rate Sensitive Composite -1.1 1.7 2.2 -2.1 -- -- -- -5.8 Oct-21 Bloomberg US Aggregate TR -1.1 2.0 2.5 -2.1 -3.6 0.8 1.4 -7.0 Oct-21 Short-Term Treasury Composite -0.4 -- -- -- -- -- -- -0.1 Mar-23 Bloomberg US Treasury 1-3 Yr TR -0.4 1.5 1.5 0.0 -0.9 1.0 0.8 -0.1 Mar-23 SSGA Short Treasury -0.4 -- -- -- -- -- -- -0.1 Mar-23 Bloomberg US Treasury 1-3 Yr TR -0.4 1.5 1.5 0.0 -0.9 1.0 0.8 -0.1 Mar-23 Marquette Associates, Inc. 3 Investment Manager Annualized Performance (Net of Fees) Market Value: $7,609.3 Million and 100.0% of Fund Ending May 31, 2023 Inception 1 Mo 3 Mo YTD 1 Yr 3 Yrs 5 Yrs 10 Yrs Inception Date _ Core Fixed Income Composite -1.2 1.6 2.2 -2.3 -- -- -- -6.6 Oct-21 Bloomberg US Aggregate TR -1.1 2.0 2.5 -2.1 -3.6 0.8 1.4 -7.0 Oct-21 Garcia Hamilton & Associates -1.2 -- -- -- -- -- -- -0.7 Mar-23 Bloomberg US Aggregate TR -1.1 2.0 2.5 -2.1 -3.6 0.8 1.4 -0.5 Mar-23 Brown Brothers Harriman & Co -1.1 -- -- -- -- -- -- -0.4 Mar-23 Bloomberg US Aggregate TR -1.1 2.0 2.5 -2.1 -3.6 0.8 1.4 -0.5 Mar-23 Credit Fixed Income Composite -0.6 0.9 1.6 -1.7 -- -- -- -10.5 Oct-21 JP Morgan EMBI Global Diversified -0.6 0.9 1.8 -1.5 -2.7 -0.1 2.1 -10.9 Oct-21 Emerging Markets Debt Composite -0.6 0.9 1.6 -1.7 -- -- -- -10.5 Oct-21 JP Morgan EMBI Global Diversified -0.6 0.9 1.8 -1.5 -2.7 -0.1 2.1 -10.9 Oct-21 SSGA EM Global Diversified -0.6 0.9 1.6 -1.7 -- -- -- -10.5 Oct-21 JP Morgan EMBI Global Diversified -0.6 0.9 1.8 -1.5 -2.7 -0.1 2.1 -10.9 Oct-21 Total Real Estate Composite -1.2 -3.2 -2.0 -9.4 -- -- -- -0.5 Oct-21 Real Estate Custom Benchmark -1.3 -4.0 -1.9 -6.4 8.7 6.6 8.0 -0.3 Oct-21 Core Real Estate Composite -1.2 -3.2 -2.0 -9.4 -- -- -- -0.5 Oct-21 Real Estate Custom Benchmark -1.3 -4.0 -1.9 -6.4 8.7 6.6 8.0 -0.3 Oct-21 Public Real Estate Composite -3.2 -4.9 0.2 -12.0 -- -- -- -11.8 Oct-21 FTSE NAREIT Equity REIT -3.2 -4.9 0.2 -12.1 8.2 4.4 5.7 -11.8 Oct-21 SSGA FTSE NAREIT -3.2 -4.9 0.2 -12.0 -- -- -- -11.8 Oct-21 FTSE NAREIT Equity REIT -3.2 -4.9 0.2 -12.1 8.2 4.4 5.7 -11.8 Oct-21 Private Real Estate Composite -0.2 -2.2 -3.1 -8.3 -- -- -- 6.6 Oct-21 NFI-ODCE Equal Weighted 0.0 -3.5 -3.5 -3.7 8.2 7.1 8.8 6.7 Oct-21 Principal USPA Fund -0.2 -2.2 -3.1 -8.3 -- -- -- 6.6 Oct-21 NFI-ODCE Equal Weighted 0.0 -3.5 -3.5 -3.7 8.2 7.1 8.8 6.7 Oct-21 4 Marquette Associates, Inc. Illinois Firefighters' Pension Investment Fund Fee Schedule Marquette Associates, Inc. 5 Illinois Firefighters' Pension Investment Fund Disclosures Benchmark History _ Total Fund Composite 25% Russell Top 200 / 9% Russell MidCap / 2% S&P 600 SmallCap / 16% MSCI World ex USA / 3% MSCI World ex USA Small Cap / 8% MSCI Emerging Markets / 2% MSCI Emerging Markets Small Cap / 3% Bloomberg US Treasury 1-3 Yr TR 4/1/2023 Present / 24% Bloomberg US Aggregate TR / 3% JP Morgan EMBI Global Diversified / 2% FTSE NAREIT Equity REIT / 3% NFI- ODCE Equal Weighted 25% Russell Top 200 / 9% Russell MidCap / 2% S&P 600 SmallCap / 16% MSCI World ex USA / 3% MSCI World ex USA Small Cap / 8% MSCI Emerging Markets / 2% MSCI Emerging Markets Small Cap / 3% Bloomberg 1-3 Year US TIPS / 9% 10/1/2021 3/31/2023 Bloomberg US Credit Int TR / 6% Bloomberg US Treasury Int TR / 3% Bloomberg US Treasury Long TR / 6% Bloomberg US Securitized MBS ABS CMBS TR / 3% JP Morgan EMBI Global Diversified / 2% FTSE NAREIT Equity REIT / 3% NFI- ODCE Equal Weighted _ Total Real Estate Composite 10/31/2021 Present 60% NFI-ODCE Equal Weighted / 40% FTSE NAREIT Equity REIT XXXXX Performance Disclosures _ Inception Performance Total Fund Composite, Private Real Estate Composite, and the Principal USPA Fund inception performance are based on an October 1, 2021 start. All other account and composite inception performance is based on an October 31, 2021 start. _ NFI-ODCE Equal Weighted Quarterly valued index. Value of the quarterly return is recognized in the last month of each quarter. 6 Marquette Associates, Inc. DISCLOSURE Marquette Associates, Inc. (“Marquette”) has prepared this document for the exclusive use by the client or third party for which it was prepared. The information herein was obtained from various sources, including but not limited to third party investment managers, the client's custodian(s) accounting statements, commercially available databases, and other economic and financial market data sources. The sources of information used in this document are believed to be reliable. Marquette has not independently verified all of the information in this document and its accuracy cannot be guaranteed. Marquette accepts no liability for any direct or consequential losses arising from its use. The information provided herein is as of the date appearing in this material only and is subject to change without prior notice. Thus, all such information is subject to independent verification and we urge clients to compare the information set forth in this statement with the statements you receive directly from the custodian in order to ensure accuracy of all account information. Past performance does not guarantee future results and investing involves risk of loss. No graph, chart, or formula can, in and of itself, be used to determine which securities or investments to buy or sell. Forward‐looking statements, including without limitation any statement or prediction about a future event contained in this presentation, are based on a variety of estimates and assumptions by Marquette, including, but not limited to, estimates of future operating results, the value of assets and market conditions. These estimates and assumptions, including the risk assessments and projections referenced, are inherently uncertain and are subject to numerous business, industry, market, regulatory, geo‐ political, competitive, and financial risks that are outside of Marquette's control. There can be no assurance that the assumptions made in connection with any forward‐ looking statement will prove accurate, and actual results may differ materially. The inclusion of any forward‐looking statement herein should not be regarded as an indication that Marquette considers forward‐looking statements to be a reliable prediction of future events. The views contained herein are those of Marquette and should not be taken as financial advice or a recommendation to buy or sell any security. Any forecasts, figures, opinions or investment techniques and strategies described are intended for informational purposes only. They are based on certain assumptions and current market conditions, and although accurate at the time of writing, are subject to change without prior notice. Opinions, estimates, projections, and comments on financial market trends constitute our judgment and are subject to change without notice. Marquette expressly disclaims all liability in respect to actions taken based on any or all of the information included or referenced in this document. The information is being provided based on the understanding that each recipient has sufficient knowledge and experience to evaluate the merits and risks of investing. Marquette is an independent investment adviser registered under the Investment Advisers Act of 1940, as amended. Registration does not imply a certain level of skill or training. More information about Marquette including our investment strategies, fees and objectives can be found in our ADV Part 2, which is available upon request.