Police & Fire Pension

POLICE & FIRE PENSION BOARD MEETING DATE: May 15, 2017 CITY HALL, ROOM 112 TIME: 10:12 A.M. Present: Doug Bagwell, Gail Budrow-Bradstreet, Stan Chubinski, John Hausman and Joe Newman. Absent: None. Also Present: Jeremy Tollas, Plante Moran Financial Advisors (PMFA); and Linda Morrison, Revenue Services and Finance. Chair Newman asked for approval of the agenda. Motion Chubinski, seconded Hausman to approve the agenda. On a voice vote, motion carried. Presented minutes of the regular meeting on March 20, 2017. Motion Budrow-Bradstreet, seconded Hausman to approve the minutes as presented. On a voice vote, motion carried. Presented a summary of assets prepared by Comerica Bank. As of 3/31/17 the market value of our portfolio was $135,111,614, a loss of $270,834 since 2/28/17. As of 4/30/17 the market value of our portfolio was $135,945,018, a gain of $833,404 since the 3/31/17. As of today, the portfolio market value is $136,107,745, which is a gain of $162,727 since the prior month end. Motion Hausman, seconded Chubinski to accept the financial report as submitted. On a voice vote, motion carried. Board Reports Bagwell – one officer left; one starting later in the month. Budrow-Bradstreet:  New hire: Ryan M. O’Connell in PD on 5/8/2017.  Officer Carl VanDyke left effective 5/14/2017. Following final pay a letter will be sent outlining contribution options for deferment or withdrawal.  Retiree Richard Harvey died 4/5/17. Retirement set up to continue for surviving spouse, Margaret, at 60% of his benefit.  Retiree Carl Laupp died 5/8/17. Retirement set up to continue for surviving spouse, Martha, at 60% of his benefit.  Theresa (Varner) Humphreys turned 55 on 5/9/17. In accordance with PA 345, Section 6(2)(e) she converts to regular retirement (3%). All changes processed with appropriate proration for number of days.  Provided Board a copy of the DROP account tracking and draft of the annual statement. It was noted DROP costs shall be 5% of the interest earned by participant so annual statement will be revised to break out interest and benefits with a note regarding the stipulation.  Provided Board a draft of proposed Election Policy for discussion/consideration. Changes suggested; final draft to come before Board at its next regular meeting. Chubinski – none. Hausman – none. May 15, 2017 Page 2 of 2 - Official Newman – none. Old Business Police and Fire Pension Handbook – Mullett not in attendance; place on next meeting agenda. Service Retirement Policy – Changes to Sections 1 and 6 regarding election of pension type presented. Motion Hausman, seconded Bagwell to approve changes as presented. On a voice vote, motion carried. New Business FAC Change for IAFF – Board received the actuarial calculation for the proposed change to IAFF contract from final average compensation (FAC) based on the best consecutive five (5) years of the last ten (10) years to a FAC based on the best consecutive three (3) years. It was noted, the cost is 3.54% and would be paid for by employees [by increasing the percent paid on pensionable wages by the same]. Post-tax vs Pre-Tax Pension Contributions – Morrison indicated the city is working toward all union and non-union groups within the Police and Fire Retirement System changing to pre-tax pension contributions. This will shift the tax liability to retirement rather than during employment. There will be a specific start date, which will require calculations for all active members to determine the post-tax contributions up to the switch to pre-tax. Separate tracking of pre-tax contributions would also start. The Board has no objection to the change. PMFA Update – Jeremy Tollas from PMFA gave an update on the latest market conditions. Report provided detail on performance of international stocks and the Russell 3000 index since 2007. Bonds did okay - still flat given interest hikes. Domestic equities doing well with small- cap lagging mid- and large-cap stocks. Overall equity returns favorable since President Trump took office due to regulatory reform, infrastructure investment and proposed tax reform. A detailed quarterly review of all asset managers provided. Tollas went over equity and bond returns by account style and touched on Boston Company LC growth, Robeco LC value, Harding Loevner International ADR and Lazarad International Equity with emerging market ADR. Portfolio time weighted returns: calendar year to date 4.84%; fiscal year to date 7.83% all net of fees. No rebalancing at this time but will likely need to raise cash in June. Public Comment – none. Next regular meeting: Monday, June 26, 2017 at 10:00 a.m. Meeting adjourned at 11:33 a.m. Respectfully submitted, Gail Budrow-Bradstreet, City Treasurer __________________________________ _________________________________ Board Member signature Board Member signature