Police & Fire Pension

POLICE & FIRE PENSION BOARD MEETING DATE: October 26, 2015 CITY HALL, ROOM 112 TIME: 10:02 A.M. Present: Douglas Bagwell, Gail Budrow-Bradstreet, Stan Chubinski, John Hausman and Joe Newman. Absent: None. Also Present: Dori Drayton of Plante Moran Financial Advisors (PMFA); Linda Morrison, Finance and Revenue Services Director. Chair Newman asked for approval of the agenda. Motion Chubinski seconded Hausman to approve the agenda. On a voice vote, motion carried. Minutes of the regular meeting of September 21, 2015 were presented. Motion Hausman, seconded Bagwell to approve the minutes as presented. On a voice vote, motion carried. A summary of assets prepared by Comerica Bank was presented. As of 9/30/15 the market value of our portfolio was $126,648,303, a loss of $2,304,054 since 8/31/15. As of today the market value of our portfolio is $130,453,265, presently a gain $3,804,962 since month end. Since June 30, total loss to the portfolio is $7,483,468. The recent gain cut this in half leaving $3,678,506 to go in order to get back to June 30 value. Motion Hausman, seconded Chubinski to accept the financial report as submitted. On a voice vote, motion carried. Board Reports Bagwell: none. Budrow-Bradstreet: Former police officer Henry McCullough resigned effective May 30, 2015. He was not vested. He requested withdrawal of all funds. On 10/13/15 his contributions of $33,864.03 plus interest of $1,559.38 was distributed with a partial sum deposited into a qualified rollover account (457 Plan) and the rest paid to McCullough. Made the Board aware of a correction to the retirement benefit for Patrick Johnson, which was revised to $1,425.16. Benefit percent was incorrectly reported for the calculation. Commission held a workshop regarding P&F Pension – purchase of service credits, military and/or general. Legacy Cost Committee, commissioned by the City and having representatives from City, outside consultant and union, will discuss. Chubinski – none. Hausman – none. Newman – none. Old Business Disability retirement application – Medical records obtained; letters sent to physicians appointed on Medical Committee. May need a special meeting to keep the process moving timely. Police & Fire Pension Board October 26, 2015 Page 2 of 3 - Official New Business Service Retirement Policy – Board to consider updating the policy to provide more detail regarding time that counts toward service credit. A draft to be presented for discussion at next meeting. Disaiblity Retirement Policy – recent information from legal counsel exposed the fact duty disability retirement does not allow the automatic 60% surviving spouse pension but rather only the election to receive a reduced disability pension and select an option benefit as provided in Section 6(1)(h) (i) and (ii) of Act 345 of 1937, as amended. Motion Bagwell, seconded Hausman to revise the current Disability Retirement Policy to include the following: “DISABILITY RETIREMENT OPTIONS  A duty disability retiree shall fall under Section 6(1)(h) for the purpose of allowing a 60% survivor benefit in accordance with Act 345 of 1937, as amended.” On a voice vote, motion carried. Portfolio – Market Update and Review: Dori of PMFA reviewed the monthly report noting the following market and portfolio points:  Feds made no interest rate change but implied probability of a rate hike, perhaps in December. Some say an interest rate hike is already priced in the market but if we go into recession it would give feds tools to help get out of a recession.  From the October 2015 Monthly Update, page 4 provides a performance overview as of 9/30/15. The Barclays Aggregate is up 1.4% as bonds haven’t moved as much as equities.  As of 10/16/15 seeing very strong equity returns in all markets - domestic, international and emerging markets.  The fourth week of the fourth quarter is historically down. Will see what happens.  Corporate earnings have not been looking great; however, so far October has been a strong month.  From the October 2015 Monthly update, page 5 illustrates trends in International developed markets. These developed countries should see earnings per share go up just as we saw for domestic earnings per share in 2011. Portfolio Review:  Most of the returns were down through the end of September; October has seen a rebound and now most are in the black.  Portfolio performance through 10/16/15 shows the first two weeks of Oct have a 3.08% gain, which annualized would be a 99.66% - not sustainable.  Fiscal year to date time weighted return net of fees is still slightly negative at -0.74% but outperformed the benchmark of -2.47%.  December is usually a strong month, with Halloween sales usually some indication of holiday sales. Halloween sales are down so far which is not a good sign. Police & Fire Pension Board October 26, 2015 Page 3 of 3 - Official Public Comment – none. Next regular meeting: Monday, November 16, 2015 at 10:00 a.m. Meeting adjourned at 10:56 a.m. Respectfully submitted, Gail Budrow-Bradstreet, Secretary __________________________________ _________________________________ Board Member signature Board Member signature