Police & Fire Pension

POLICE & FIRE PENSION BOARD MEETING DATE: May 23, 2016 CITY HALL, ROOM 112 TIME: 10:003 A.M. Present: Doug Bagwell, Gail Budrow-Bradstreet, Stan Chubinski, John Hausman and Joe Newman. Absent: None. Also Present: Dori Drayton, Plante Moran Financial Advisors (PMFA); Linda Morrison, Finance & Revenue Services Director Chair Newman asked for approval of the agenda. Motion Chubinski, seconded Bagwell to approve the agenda as amended. On a voice vote, motion carried. Minutes of the regular meeting of April 18, 2016 were presented. Motion Hausman, seconded Chubinski to approve the minutes as presented. On a voice vote, motion carried. A summary of assets prepared by Comerica Bank was presented. As of 4/30/16 the market value of our portfolio was $129,383,314, a loss of $670,497 since 3/31/16. As of today the market value of our portfolio is $128,224,289, presently a a loss of $1,159,025 since the 4/30/16 month end. Motion Hausman, seconded Bagwell to accept the financial report as submitted. On a voice vote, motion carried. Board Reports Bagwell – starting over- all six either took other jobs or did not make it through the process. Budrow-Bradstreet:  Shawn Metheny’s request to purchase one year military service credit was approved by City Commission on 5/3/16 (resolution no. 129). The total cost to the City is $28,336; Metheny’s required contribution of $5,354.08 has been paid and deposited with Comerica.  James Tuyls’ request to purchase one year military service credit was approved by City Commission on 5/3/16 (resolution no. 130). The total cost to the City is $20,297; Tuyls’ required contribution of $4,642.40 has been paid and deposited with Comerica. Motion Hausman, seconded Bagwell to approve the following resolution: WHEREAS, the Board of Trustees is in receipt of an application for retirement from James D Mitcavish requesting an effective retirement date of 4/9/16, and WHEREAS, James D Mitcavish is eligible for retirement based on his service credit pursuant to Act 345 of the Public Acts of 1937, as amended, and retirement provisions of the union contract, and WHEREAS, the final actuarial calculations have been received, therefore be it RESOLVED, that the application of James D Mitcavish for retirement is approved, and RESOLVED, the retirement benefit for James D Mitcavish shall commence as of 4/9/16, and RESOLVED, the gross monthly benefit is $4,224.08 subject to tax withholdings and any other elective deductions, and RESOLVED, the gross retroactive payment of $3,097.66 was paid on or about 5/13/16 and the regular gross monthly benefit shall begin 6/1/16. Police & Fire Pension Board May 23, 2016 Page 2 of 3 - Official On a voice vote, motion carried. Chubinski – none. Hausman – June 20 a new employee to start. Newman – none. Old Business Service Retirement Policy – presented a revised draft following review by subcommittee of Hausman, Budrow-Bradstreet and Morrison; will send to legal counsel for formal review. New Business PMFA Update: Dori Drayton of PMFA gave a market update and portfolio review:  PMFA provided a market overview of the active management compared to the index returns for the quarter ended March 31 and for the one year ended March 31 which illustrate active managers, in general have not done as well as the indexes – it has been a tough market;  Domestic equity active management overview illustrates for the quarter and one-year small cap value was top performer indicating a flight to quality;  Domestic fixed income active management overview illustrates extended maturity did better in the short term (quarter ended March 31) but not so for the one year ended March 31;  Emerging markets finally did well (in the quarter) but down for the year; US did better than international markets overall;  International fixed income faired the best as the US dollar weakened;  Takeaway – diversity important Drayton touched on asset managers as follows:  Boston Co Large Cap Growth stocks – last quarter they ranked just above median manager but below the benchmark; PMFA contacted the manager to discuss; biotech and life sciences sectors dragged a bit for the quarter causing the low performance; no change at this time;  Robeco Large Cap Value stocks – last quarter ranked low in the index and benchmark; they are underweight in utilities compared to peer group; PMFA is watching them quite carefully with no significant concerns; PMFA feels theme of their style of investing will turn things around if/when interest rate goes up. If nothing happens that may be consideration for change.  Westfield – last quarter benchmark has done quite well compared to active managers; Westfield was no exception; they carry stocks in sectors of consumers discretionary and utilities that did not do as well. Mid cap growth has been a difficult space.  Earnest Partners were underweight in mortgage backed securities compared to the peer group resulting in returns below the benchmark; it should be noted, however, we are limited on that type of investment;  Loomis was in the top 33% of their peer group for the last quarter; Portfolio summary: Police & Fire Pension Board May 23, 2016 Page 3 of 3 - Official  As of April 30 the portfolio return is slightly behind benchmark – 2.21% vs 2.66%;  The time weighted return net of fees (TWR) as of May 9: calendar year to date return is 1.73%; annualized that is 4.94%; fiscal year to date is only 0.57%, annualized to 0.67%  Federal Reserve meeting in June; the market is pricing in a 50% chance interest rates will rise;  Employment numbers still good; positive manufacturing numbers; retail sector – stores (brick and mortar locations) not doing so well but on-line retailers okay;  Some the market changes are due to profit taking and rebalancing. Public Comment – Revenue and Finance Services Director Morrison had a conversation with City Manager Fleury and Budrow-Bradstreet to consider having the City make the full contribution at the time an employee is granted approval to purchase military service credit. This would only improve the funding status sooner (slightly) and the “cost” of the Commission action would be more timely; however, there is no official action or change at this time. Next regular meeting: Monday, June 20, 2016 at 10:00 a.m. Meeting adjourned at 10:47 a.m. Respectfully submitted, Gail Budrow-Bradstreet, Secretary __________________________________ _________________________________ Board Member signature Board Member signature