Police & Fire Pension

POLICE & FIRE PENSION BOARD MEETING DATE: July 20, 2015 CITY HALL, ROOM 112 TIME: 10:04 A.M. Present: Doug Bagwell, Gail Budrow-Bradstreet and John Hausman Absent: Stan Chubinski and Joe Newman. Also Present: Jeremy Tollas of Plante Moran Financial Advisors (PMFA); Linda Morrison, Finance and Revenue Services Director. Budrow-Bradstreet asked for approval of the agenda. Motion Hausman, seconded Bagwell to approve the agenda. On a voice vote, motion carried. Minutes of the regular meeting of June 16, 2015 were presented. Motion Budrow-Bradstreet, seconded Hausman to approve the minutes as presented. On a voice vote, motion carried. A summary of assets prepared by Comerica Bank was presented. As of 6/30/15 the market value of our portfolio was $133,460,939, a loss of $1,008,856 since 5/31/15. As of today the market value of our portfolio is $134,131,771, presently a gain of $670,832 since the 6/30/15 month end. On June 29, 2015 the employer contribution of $2,014,255.42 was deposited into our regular cash account. Motion Bagwell, seconded Hausman to accept the financial report as submitted. On a voice vote, motion carried. Board Reports Bagwell – none. Budrow-Bradstreet: none Hausman – none. Old Business FAC Policy Review: Final revisions to be presented at the next meeting to consider formal adoption. Revised Pension Benefits: Recognizing the overpayment of benefits, retirees provided a repayment plan. Motion Bagwell, seconded Hausman to approve the following resolutions and agreements for repayment of benefits: WHEREAS, the Board of Trustees of the City of Battle Creek Police and Fire Retirement System is vested with the authority and fiduciary responsibility for the administration, management and operation of the Retirement System, and WHEREAS, upon discovery of an overpayment of benefits due to an error in the benefit calculation the Board of Trustees has a duty to correct the error and, as far as is practicable, to set up a repayment plan, and WHEREAS, the final average compensation upon which Kurt Alan Dittmer’s original retirement benefit was calculated was found to be incorrect and overstated, and Police & Fire Pension Board July 20, 2015 Page 2 of 4 - Official WHEREAS, Kurt Alan Dittmer (hereafter also referred to as “retiree”) was paid a monthly gross benefit of $7,112.40 effective 2/16/2013, and WHEREAS, retiree’s revised gross monthly benefit is $6,695.56 which resulted in an over-payment totaling $12,004.99 less health trust deductions of $300.12 for a net overpayment of $11,704.87 as of June 1, 2015. THEREFORE BE IT RESOLVED, Kurt Alan Dittmer agrees to a repayment plan over the span of ten (10) years with a monthly deduction of $97.54 for 119 months beginning August 1, 2015 with the final monthly deduction of $97.61 in the 120 th month. BE IT FURTHER RESOLVED, should retiree die before the entire overpayment of $11,704.87 is recovered, retiree’s estate shall pay any remaining balance owed in a lump sum. BE IT FURTHER RESOLVED, this resolution shall set forth a binding contract between Kurt Alan Dittmer and the City of Battle Creek Police and Fire Retirement System, with said resolution being signed by Kurt Alan Dittmer and Joseph Newman, Chairman of the Board of Trustees for the City of Battle Creek Police and Fire Retirement System. and WHEREAS, the Board of Trustees of the City of Battle Creek Police and Fire Retirement System is vested with the authority and fiduciary responsibility for the administration, management and operation of the Retirement System, and WHEREAS, upon discovery of an overpayment of benefits due to an error in the benefit calculation the Board of Trustees has a duty to correct the error and, as far as is practicable, to set up a repayment plan, and WHEREAS, the final average compensation for William Jerry Woodward, hereafter referred to as “retiree”, upon which his original retirement benefit was calculated, was found to be incorrect and overstated, and WHEREAS, retiree was paid a monthly gross benefit of $5,691.48 effective 4/23/2012, and WHEREAS, retiree’s revised gross monthly benefit is $5,267.52 which resulted in an overpayment totaling $16,011.56 less health trust deductions of $480.35 for a net overpayment of $15,531.21 as of June 1, 2015. THEREFORE BE IT RESOLVED, William Jerry Woodward agrees to a repayment plan over the span of ten (10) years with a monthly deduction of $129.42 for 119 months Police & Fire Pension Board July 20, 2015 Page 3 of 4 - Official beginning August 1, 2015 with the final monthly deduction of $124.28 in the 120 th month, and BE IT FURTHER RESOLVED, should retiree die before the entire overpayment of $15,531.21 is recovered, retiree’s estate shall pay any remaining balance owed in a lump sum. BE IT FURTHER RESOLVED, this resolution shall set forth a binding contract between William Jerry Woodward and the City of Battle Creek Police and Fire Retirement System, with said resolution being signed by William Jerry Woodward and Joseph Newman, Chairman of the Board of Trustees for the City of Battle Creek Police and Fire Retirement System. On a voice vote, motion carried. New Business Policy – Correction of Errors, Overpayment/Underpayments: consensus of the Board to discuss at a future meeting. FY 2015-2016 Budget presented. Motion Budrow-Bradstreet, seconded Hausman to approve the budget with proposed changes to employer contribution (to match what City budgeted) and custody fees (based on PMFA figure). On a voice vote, motion carried. MAPERS Fall Conference: Board authorized Budrow-Bradstreet to attend the conference. Plante Moran Security Class Action Settlement Services: Plante Moran is offering security class action settlement services. These services already provided at a minimal cost by Comerica. Motion Hausman, seconded Budrow-Bradstreet to opt out of this service rather than duplicate efforts. On a voice vote, motion carried. Portfolio Update: Jeremy Tollas of PMFA gave an economic and capital market update noting the following  volatility has re-entered the market; June volatile for multiple reasons – FOMC did not give a firm decision on interest rates;  Bond returns are down about .1%, month to date 1.1%; right now actually flat  Some investors fleeing to bonds due to volatility in the stock market due to concerns over Greece’s debt.  In general markets have leveled off;  Equity markets rallied 3%; stocks doing well; earnings reports due out soon;  Emerging markets – fairly flat year to date, still underperforming;  Watching FOMC for interest rate increases. Performance summary: A majority of funds had a drawback in June – both bonds and stocks. Lazard & Harding Loevner both underperforming; however, once there is a blended index these should look better. The time weighted return (TWR) net of fess as of 6/30 was 1.65% Police & Fire Pension Board July 20, 2015 Page 4 of 4 - Official compared to the benchmark of 1.19%. Through July 10 the fiscal year TWR is up just 0.15%; calendar year TWR is 1.80%, both exceeding the benchmark. Tolllas noted the market has rallied since then. The 2014-15 fiscal year TWR return was 3.62%. Asset allocation looks okay. No rebalancing necessary. PMFA will see how the 2% invested in international emerging markets is affecting performance. Public Comment – Next regular meeting: Tuesday, August 18, 2015 at 10:00 a.m. Meeting adjourned at 10:45 a.m. Respectfully submitted, Gail Budrow-Bradstreet, Secretary __________________________________ _________________________________ Board Member signature Board Member signature