Police & Fire Pension

POLICE & FIRE PENSION BOARD MEETING DATE: March 20, 2017 CITY HALL, ROOM 112 TIME: 10:00 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); and Nancy Mullett, Employee Relations – Labor Attorney. Chair Newman asked for approval of the agenda. Motion by Bagwell, seconded by Hausman to approve the agenda. On a voice vote, motion carried. Presented minutes of the regular meeting of February 21, 2017. Motion by Chubinski, seconded by Hausman to approve the minutes as presented. On a voice vote, motion carried. Presented a summary of assets prepared by Comerica Bank. As of 2/28/17 the market value of our portfolio was $135,382,448, a gain of $1,772,185 since 1/31/17. As of 3/20/17 the market value of our portfolio was $135,507,822, presently a slight gain of $125,374 since the 2/28/17 month end. Motion by Hausman, seconded by Bagwell to accept the financial report as submitted. On a voice vote, motion carried. Board Reports Bagwell – Rease Merrill died. Budrow-Bradstreet: Ann Piper to retire effective 5/31/17. Retiree Rease Merrill died 3/14/17. His March benefit was pulled back and will be re-issued for 14 days in March, or $1,430.89. Motion Bagwell, seconded Hausman to approve the following resolutions: WHEREAS, the Board of Trustees is in receipt of an application for retirement from Esteban Rivera requesting an effective retirement date of 02/09/2017, and WHEREAS, Esteban Rivera is eligible for retirement with a benefit immediately payable based on his service credit (military service credit purchase combined with active employment) pursuant to Act 345 of the Public Acts of 1937, as amended, and retirement provisions of the union contract, and WHEREAS, the final actuarial calculation was received, therefore be it RESOLVED, that the application of Esteban Rivera for retirement is approved, and RESOLVED, the retirement benefit for Esteban Rivera shall commence as of 02/09/2017, and RESOLVED, the gross monthly benefit is $4,560.08 subject to tax withholdings and any other elective deductions, and RESOLVED, the gross retroactive payment of $7,654.42 for 19 days in February and all of March was paid on or about 4/1/2017 and the regular gross monthly benefit shall begin 5/1/17. March 20, 2017 Page 2 of 3 - Official WHEREAS, the Board of Trustees is in receipt of an application for participation in the Deferred Retirement Option Plan (DROP) from Edward O. Marshall II requesting an effective retirement date of 02/04/2017, and WHEREAS, Edward O. Marshall II is eligible for retirement with a benefit immediately payable 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 calculation was received, therefore be it RESOLVED, that the application of Edward O. Marshall II for participation in the DROP is approved, and RESOLVED, the DROP benefit for Edward O. Marshall II shall commence as of 02/04/2017, and RESOLVED, the gross monthly retirement benefit is $4,445.65 and shall be Edward O. Marshall II’s DROP benefit credited monthly to his DROP account and RESOLVED, Edward O. Marshall II’s participation in the DROP shall terminate on February 4, 2022. On a voice vote, motion carried. Chubinski – none. Hausman – how do we know when retiree dies? Budrow-Bradstreet indicated Comerica runs a check or we often find out from Risk due to insurance changes. Newman – none. Old Business Police and Fire Pension Handbook – Mullett still working on it. 2/21/17 Inquiries: held discussion on questions posed at the last meeting. Mullett did explain that during bargaining the groups looked at the potential for promotions and different outcomes before they agreed upon the new benefit. As far as they could tell there wasn’t a known chance for this to happen. As for the DROP, there is nothing that would be put in the contract language to restrict who may participate. New Business PMFA Update Dori Drayton from PMFA gave an update on latest economic conditions and volatility of the market. High yield bonds– those willing to take more risk - are being rewarded. Equity markets up, doing well. International stocks for emerging markets doing the best – up 8.7% for CY 2017. Policies of the current Administration attractive to business. Portfolio returns – Loomis Sayles – negative bond return and underperforming the benchmark. Quality and duration are likely the reason for the poor return. The time weighted return net of fees: FYTD return as of 3/10/17 is 5.48%, annualized - 8.0%; CYTD as of 3/10/17 is 2.6%, 14% annualized. Hausman inquired about possible rebalancing given the fact fixed income could be going nowhere for some time unless there is a flight to quality. PMFA will bring modeling data for the next meeting for review by the board for any rebalancing considerations. March 20, 2017 Page 3 of 3 - Official MAPERS spring conference is 5/21 – 5/23. Budrow-Bradstreet will send the registration and hotel info to Bagwell, Newman and Hausman. Chubinski cannot attend and Budrow- Bradstreet also not likely. Public Comment – Nancy Mullett commented she and Finance Director Morrison were discussing that P&F contributions to the pension fund are all post-tax dollars. They were wondering if the Board has an opinion on this? Mullett thinks it could be a Board recommendation or policy to allow these to be pre-tax which will reduce the current gross taxable wages for active police and fire employees. P&F legal counsel said no law – could be handled in bargaining agreement. Next regular meeting: Monday, April 24, 2017 at 10:00 a.m. Meeting adjourned at 11:23 a.m. Respectfully submitted, Gail Budrow-Bradstreet, City Treasurer __________________________________ _________________________________ Board Member signature Board Member signature