Police & Fire Pension

POLICE & FIRE PENSION BOARD MEETING DATE: September 14, 2016 CITY HALL, ROOM 112 TIME: 10:03 A.M. Present: Gail Budrow-Bradstreet, John Hausman and Joe Newman. Absent: Doug Bagwell and Stan Chubinski. Also Present: Linda Morrison, Revenue Services and Finance Director and Nancy Mullett, Labor Relations Attorney. Chair Newman asked for approval of the agenda. Motion Hausman, seconded Budrow- Bradstreet to approve the agenda as amended. On a voice vote, motion carried. Minutes of the regular meeting of August 15, 2016 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 8/31/16 the market value of our portfolio was $132,640,690, a loss of $848,934 since 7/31/16. As of today the market value of our portfolio is $130,866,598, presently an additional loss of $1,774,092 since the 8/31/16 month end. Motion Hausman, seconded Budrow-Bradstreet to accept the financial report as submitted. On a voice vote, motion carried. Board Reports Bagwell – none. Budrow-Bradstreet: Comerica’s new processes for setting up retiree benefits, retroactive payments and changes to either benefits or deductions is working well. Retroactive payments are now processed immediately. Only drawback is with deductions. No deductions can be processed with the retroactive payment; therefore, all “catch up” with insurance premiums or health trust deductions are done with the first regular monthly benefit and then changed again with the 2nd regular monthly benefit. Brad Palmer retired effective 9/6/16. Paperwork will be processed following final pay. Surviving spouse Joyce Marshall died 8/23/16. Repayment of funds has been requested and monthly benefit stopped. Motion Hausman, seconded Budrow-Bradstreet, to approve the following resolutions: 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 final average 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 Police & Fire Pension Board September 14, 2016 Page 2 of 3 - Official WHEREAS, the final average compensation for James C. Walters, 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 $6,262.31 effective 1/2/2016, and WHEREAS, retiree’s revised gross monthly benefit is $6,241.46 which resulted in an overpayment totaling $166.13 less health trust deductions of $3.35 for a net overpayment of $162.78 as of September 1, 2016. THEREFORE, BE IT RESOLVED, James C. Walters agrees to a one time lump sum repayment plan to be processed for the October 1, 2016 benefit payment, and BE IT FURTHER RESOLVED, this resolution shall set forth a binding contract between James C. Walters and the City of Battle Creek Police and Fire Retirement System, with said resolution being signed by James C. Walters 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 final average 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 Ray A. Felix, 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 $6,958.34 effective 8/1/2014, and WHEREAS, retiree’s revised gross monthly benefit is $6,928.27 which resulted in an overpayment totaling $751.75 less health trust deductions of $6.60 for a net overpayment of $745.15 as of September 1, 2016. THEREFORE BE IT RESOLVED, Ray A. Felix agrees to a one time lump sum repayment plan to be processed for the October 1, 2016 benefit payment, and BE IT FURTHER RESOLVED, this resolution shall set forth a binding contract between Ray A. Felix and the City of Battle Creek Police and Fire Retirement System, with said resolution being signed by Ray A. Felix. On a voice vote, motion carried. Hausman – none. Newman – none. Old Business Service Retirement Policy – motion Budrow-Bradstreet, seconded Hausman to table discussion on the draft Service Retirement Policy to the next meeting. On a voice vote, motion carried. New Business PMFA Update: Tim Wendt gave an overview of the markets noting the following:  August was relatively calm following the first few days of the BREXIT vote;  September – big swings – market was overdue; not a great jobs report, disappointing global oil reports and fed transparency regarding interest rates all contributing factors; Police & Fire Pension Board September 14, 2016 Page 3 of 3 - Official  The PMFA Investment Committee met to review manager’s strategy and asset allocation; no change in strategy recommended;  Presidential election may increase volatility; however, both candidates are talking about infrastructure spending which could spark some growth in both markets;  Debt to GDP is back in line with historical figures which is good. Jeremy Tollas made the following comments regarding the portfolio specifics:  Time weighted return as of 8/31/16 5.58%, one percent below benchmark  Loomis Sayles outperforming benchmark; in general low quality, high yield bonds up 12%; high quality, high yield bonds up 6%;  Earnest Partners Duration – falling interest rates hurt some, also they are high quality bonds;  Robeco Large Cap – some sectors are over-valued and doing well in the short term; Robeco not investing in these same sectors; PMFA recommends staying with this manager, going for steady, long term growth;  Westfield – stock selection issues with energy sector hurt returns this time;  Robeco Small Cap – still doing well but lower than benchmark;  International investments outperform the benchmark and still doing well; emerging markets much better than last year;  No rebalancing at this time. Public Comment – none. Next regular meeting: Monday, October 17, 2016 at 10:00 a.m. Meeting adjourned at 10:39 a.m. Respectfully submitted, Gail Budrow-Bradstreet, Secretary __________________________________ _________________________________ Board Member signature Board Member signature