Police & Fire Pension

POLICE & FIRE PENSION BOARD MEETING DATE: July 19, 2016 CITY HALL, ROOM 112 TIME: 10:07 A.M. Present: Doug Bagwell, Gail Budrow-Bradstreet, John Hausman and Joe Newman. Absent: Stan Chubinski Also Present: Dori Drayton, Plante Moran Financial Advisors (PMFA). Chair Newman asked for approval of the agenda. Motion Bagwell, seconded Hausman to approve the agenda as amended. On a voice vote, motion carried. Minutes of the regular meeting of June 20, 2016 were presented. Motion Bagwell, 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 6/30/16 the market value of our portfolio was $131,951,862, a gain of $1733,203 since 5/31/16. As of today the market value of our portfolio is $133,248,796, presently an additional gain of $1,296,934 since the 6/30/16 month end. On June 27, 2016 the employer contribution of $2,337,515.24 was deposited into our regular cash account. Motion Hausman, seconded Bagwell to accept the financial report as submitted. On a voice vote, motion carried. Board Reports Bagwell – two new hires on 7/11 – Daniel Wilkins and Michael Harrison, Jr. Inquired about the cost for Esteban Rivera’s additional service credit purchase – why it was so much more than two other recent military service purchases. Budrow-Bradstreet offered the following: GRS was contacted about this very question; they reviewed the calculations of all three and his is correct. Simply comes down to the individual criteria for each request, their age, years of service, wages. Budrow-Bradstreet: Surviving spouse, Noralee Bracy died 6/26/16. Final benefit was adjusted accordingly. Distributed copy of memo to City Commission regarding the requirement of actuarial valuation requirements for benefit changes. Hausman – Will wait to see if City Administration follows through with actuarial valuations after the fact for benefit changes, including the DROP program for recent Police Lieutenant contract. Newman – none. Old Business Service Retirement Policy – no draft from VanOverbeke’s office yet. New Business PMFA Update: Dori Drayton of PMFA gave a market update and portfolio review:  Brexit impact – dollar index virtually unchanged for the month of June; fixed income indices all positive; long term yields fell along with expectations for interest rate hike. Police & Fire Pension Board July 19, 2016 Page 2 of 2 - Official  Reduction in interest rates drives the present value of the retirement liability up – not good.  Equity indices – some good returns with mid cap fairing better than small or large cap; emerging markets doing very well – up 4% as of 6/30.  Global investors still like U.S. because the other central banks have lower interest rates than U.S., some negative.  Portfolio through 6/30/16 has return of 3.21%; slightly below benchmark of 3.96%  Fiscal year to date time weighted return (net of fees) is just 2.03% which is below the 6.75% used for actuarial assumptions.  Start of the fiscal year looks good with improved returns.  No need for rebalancing. Public Comment – none. Next regular meeting: Monday, August 15, 2016 at 10:00 a.m. Meeting adjourned at 10:50 a.m. Respectfully submitted, Gail Budrow-Bradstreet, Secretary __________________________________ _________________________________ Board Member signature Board Member signature