Police & Fire Pension

POLICE & FIRE PENSION BOARD MEETING DATE: March 21, 2016 CITY HALL, ROOM 302A TIME: 10:04 A.M. Present: Gail Budrow-Bradstreet, Stan Chubinski, John Hausman and Joe Newman. Absent: Doug Bagwell Also Present: Jeremy Tollas, Plante Moran Financial Advisors (PMFA); Linda Morrison, Finance & Revenue Services Director Chair Newman asked for approval of the agenda. Motion Hausman, seconded Chubinski to approve the agenda as amended. On a voice vote, motion carried. Minutes of the regular meeting of February 8, 2016 and March 3, 2016 special meeting 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 2/29/16 the market value of our portfolio was $125,978,541, a loss of $512,965 since 1/31/16. As of today the market value of our portfolio is $128,782,365, presently an additional gain of $2,803,824 since the 2/29/16 month end. This is still about $746,000 shy of the portfolio last December 31 and more than $4.6 million shy of July 1 value. Motion Hausman, seconded Chubinski to accept the financial report as submitted. On a voice vote, motion carried. Board Reports Budrow-Bradstreet: Surviving spouse Katherine Willbur died 2/2/16. Comerica recovered the funds and her final adjusted payment for two days in February was sent out. Shawn F. Metheny submitted a request to City Manager Fleury to purchase one year military service credit. Chubinski – none. Hausman – none. Newman – none. Old Business Service Retirement Policy – no action at this time. New Business GRS 6-30-15 Actuarial Review – David Hoffman from GRS presented the 6/30/15 Actuarial Valuation. Hoffman was pleased the assumptions were changed. Comments include:  most plans are working toward the reduced interest rate assumption of 6.75% Police & Fire Pension Board March 21, 2016 Page 2 of 3 - Official  one change to revisit next year – recommend we lower that percent of wage growth. If this is changed it will give a better estimate of where the fund is and will likely increase the contribution requirements.  New mortality table was used and should be able to leave in place until 2019 because changes are automatically built in.  Normal cost is 24.79% - a drop from 2015 due to change in assumptions.  Amortization payment increased by slightly more than 2%.  Total contribution went up 0.68%.  Review of the Development of Funding Value of Assets shows in each of the last valuations, funding value was a little less than the market value. Some of the investment loss experience in 2015 was totally offset by the investment gain of prior years.  Gains and losses spread over the next five years shows we have a small cushion this year; next year even a bit better;  Payouts are roughly 70% of payroll. If the Fund continues at that rate we should be able to keep making our benefit payments. Questions from the Board as follows: Q – how are we aligning with other PA 345 plans as a percent of payroll? A – not bad, haven’t reduced actives as much as some others Q – what would it cost to look at change in payroll % increase? A – $2000 for one change analysis Q – as we go forward with valuations will the DROP program show up or stand out in future valuations? A – no. PMFA Update: Jeremy Tollas of PMFA gave a market update and portfolio review:  In the printed report the chart on page 3 illustrates market vs fed expectations for the federal funds rate: o very low historically. o market expectations much lower than fed rate. o feds have since cut its expectations.  Feds are not making a move to continue to increase rates due to slow global growth.  Unemployment still tracking down; oil prices low due to global needs/concerns.  Fixed income: Barclays up 2.1% year to date and further rallied to 2.5%.  Equity indices –through March 18 there has been a 6% rally since the printed report.  Domestically PMFA feels positive about economic data – it’s the global concerns.  Through February 29 – bonds all positive; equities fairly negative; since March a lot has happened and S&P 500 now positive.  Time weighted return (net of fees) as of 3/10 – down .90%; fiscal year to date time weighted return is -2.02%; annualized the return is -2.9%  Asset allocation – bonds slightly overweight but with changes as of meeting date should be more on target. Police & Fire Pension Board March 21, 2016 Page 3 of 3 - Official MAPERS Spring Conference: Supplied copies of conference agenda and registration. Also provided copy of Education policy for reference. No one attending at this time. Public Comment – none. Next regular meeting: Monday, April 18, 2016 at 10:00 a.m. Meeting adjourned at 10:44 a.m. Respectfully submitted, Gail Budrow-Bradstreet, Secretary __________________________________ _________________________________ Board Member signature Board Member signature