Police & Fire Pension

POLICE & FIRE PENSION BOARD MEETING DATE: December 19, 2016 CITY HALL, ROOM 112 TIME: 10:05 A.M. Present: Gail Budrow-Bradstreet, Stan Chubinski, John Hausman and Joe Newman. Absent: Doug Bagwell. Also Present: Dori Drayton and Jeremy Tollas from Plante Moran Financial Advisors (PMFA) and 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 November 22, 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 11/30/16 the market value of our portfolio was $129,695,681, a gain of $51,087 since 10/31/16. As of today the market value of our portfolio is $130,489,965 presently a gain of $794,284 since the 11/30/16 month end. Motion Hausman, seconded Chubinski to accept the financial report as submitted. On a voice vote, motion carried. Board Reports Budrow-Bradstreet: actuary and audit done Chubinski – none. Hausman – met with L Morrison to discuss the DROP program and how it will work. The interest earned by anyone in the DROP program (Fire) is earned quarterly. The total amount of the DROP funds will be reported to the Board following each quarterly interest calculation as the P&F portfolio will be a combined total of the DROP monies and the pension fund. Newman – none. Old Business Service Retirement Policy – still in process of final review by legal counsel. New Business Police & Fire Pension Handbook – distributed Pension Benefits Handbook that HR has used since 2003. Board members to review and discuss at January meeting. Election of Officers: Motion Hausman, seconded Chubinski the officers remain the same – Joe Newman, Chair; Stan Chubinski, Vice Chair, Budrow-Bradstreet, Secretary/Treasurer. On a voice vote, motion carried. DROP Program Forms – Proposed Revisions: Reviewed the changes proposed by the Union and legal counsel’s opinions to accept changes or not. Will present the final document at the January meeting for final approval. Police & Fire Pension Board December 19, 2016 Page 2 of 2 - Official PMFA Update Drayton and Tollas provided a brief update on the market changes and portfolio value.  November was an eventful month; sector performance following the presidential election - financials leading the way; there is a substantial gap between the leading sector (financials) and bottom sector (utilities);  Expectation with Trump there will be easing of lending by banks which is being priced into the financial sector; makes it that much harder for active managers to over perform; rising interest should drive profitability for the financial sector;  Equity returns doing well; fixed income down except for high yield; small cap stocks up 11% since November; EM had a large pullback;  GDP revised to 3.2% (increase); consumer spending still continues to be positive; Labor market strong, jobs report meeting expectations;  PMFA continues to think EM are still undervalued; need to be patient; not sure how long it will take;  Small caps being watched closely;  Year to date returns on bonds doing well although Richmond Capital and Earnest Partners are slightly below benchmark;  domestic managers doing well on an absolute basis; more of a challenge for performance for active managers; small cap stocks rallied;  Total portfolio up 5.2% as of November 30; Calendar year to date time weighted return (TWR) through 12/7/16 is 6.05; fiscal year to date TWR is 2.76%.  Raised cash after last meeting; no recommendation for rebalancing or change in asset allocation. PMFA fee review done annually for fairness to both firm and client. In 2008 plan was about $90 million and we are presently on a graduated fee schedule. PMFA suggesting it doesn’t cost a lot more once we are exceeding the $13 0million mark and suggested a fixed dollar amount going forward rather than the graduated percent of assets. If the portfolio continues to go down a fixed dollar amount would not be favorable to pension fund. Motion Hausman, seconded Chubinski to accept the proposal by PMFA for a guaranteed fee schedule not to exceed $95,000 for one year with the flexibility of the Board to make a change if necessary. This fee proposal is effective January 1, 2017. On a voice vote, motion carried. Public Comment – none. Next regular meeting: Tuesday, January 24, 2017 at 10:00 a.m. Meeting adjourned at 11:35 a.m. Respectfully submitted, Gail Budrow-Bradstreet, Secretary __________________________________ _________________________________ Board Member signature Board Member signature