Police & Fire Pension

POLICE & FIRE PENSION BOARD MEETING DATE: November 20, 2017 CITY HALL, ROOM 112 TIME: 10:03 A.M. Present: Doug Bagwell, Gail Budrow-Bradstreet, Jake Martin and Joe Newman. Absent: Stan Chubinski (excused). Also Present: Jeremy Tollas, Paul Olmsted and Dori Drayton of Plante Moran Financial Advisors (PMFA); and Linda Morrison, Revenue Services/Finance Director. Chair Newman asked for approval of the agenda. Motion Bagwell, seconded Budrow- Bradstreet to approve the agenda. On a voice vote, motion carried. Presented minutes of the regular meeting on October 17, 2017. Motion Bagwell, seconded Martin to approve the minutes as presented. On a voice vote, motion carried. Presented a summary of assets prepared by Comerica Bank. As of 10/31/17 the market value of the portfolio was $142,469,221, a gain of $915,675 since 9/30/17. As of today, the portfolio market value is $142,446,220, which is a slight loss of $23,001 since the prior month end. Motion Martin, seconded Bagwell to accept the financial report as submitted. On a voice vote, motion carried. Board Reports Bagwell – hiring two new officers in December. Budrow-Bradstreet:  Timothy Raymond resigned 9/20/16. Withdrawal of contributions plus interest totaling $3,090.95 was sent 12/1/16.  Retiree Ed Jacobs died 9/12/16. His final pay was adjusted for 12 days in 2016. No eligible surviving spouse.  Retiree Robert Ruecker died 10/12/16. His spouse at time of retirement, Barbara, was set up to receive 60% survivor benefit. Motion Bagwell, seconded Budrow-Bradstreet to approve the non-duty disability resolution as follows: WHEREAS, the Board of Trustees received an application for non-duty disability retirement from Scott L Silverman on June 15, 2017, and WHEREAS, it was determined by independent medical examination that Scott L Silverman shall be deemed unable to perform the duties of Police Officer making him eligible for retirement pursuant to Section 6(2)(e), Act 345 of the Public Acts of 1937, as amended, and WHEREAS, the final actuarial calculation has been received, therefore be it RESOLVED, that the application of Scott L Silverman for non-duty disability retirement is approved, and RESOLVED, the retirement benefit for Scott L Silverman shall commence as of 6/15/17, and November 20, 2017 Page 2 of 3 - Official RESOLVED, the gross monthly benefit payable to age 55 is $1,970.92, subject to tax withholdings and any other elective deductions, and RESOLVED, the gross monthly benefit payable at age 55 and thereafter is $3,941.85, and RESOLVED, the estimated gross retroactive payment of $6,966.43 was paid on or about 10/17/2017 and the regular gross monthly benefit began 11/1/2017. RESOLVED, Silverman’s payment for 1/1/2018 shall be adjusted for the difference between actual and estimated payments made through 12/1/2017. On a voice vote, motion carried. MAPERS membership reviewed and will be renewed. Martin – Brandon Rumsey, new hire in September already left the City. Newman – no report. Old Business Police and Fire Pension Handbook – Revised pension handbook with all changes presented. Motion Bagwell, seconded Martin to adopt the P&F pension benefits handbook as presented. On a voice vote, motion carried. Recommend to City all police and fire members receive a copy. New Business PMFA Update – Dori Drayton of PMFA gave an overall market update of the fixed income and equity indices. She noted the following:  Provided chart on volatility changes – days and how much it moved – as well as performance overview of the indexes. She went on to highlight the following market/economic influences: o Strong equity market continues through October, supported by US and global expansion; variability in GDP growth is the lowest in 50 years across countries; interest rates unchanged; unemployment down to 4.1% and corporate earning growth contributing significantly. Jeremy Tollas reviewed the quarterly market report – data as of 9/30/17 – highlighting the following:  Median managers for large cap equity, International equities, and fixed income (bonds) – outperformed their respective index;  Small cap equity – median manager underperformed index slightly;  Asset allocation – no rebalancing necessary;  Cumulative returns of fund to benchmark – outperformed  Boston Co large cap growth – last quarter performance lagging the index growth due to stock selections; PMFA still feels they are positioned well for growth; will keep an eye on them but confident for now;  Robeco large cap value – solid stock selections specifically in financials; underweight in utilities which hurt them some but still outperformed overall;  Lazard outperformed both benchmarks; solid stock selection within telecom; November 20, 2017 Page 3 of 3 - Official Paul Olmsted, Fixed Income Analyst, gave Board an overview of the analyses PMFA employs for review/oversight of the fixed income managers. Olmsted highlighted the following:  conducted a recent on-site manager visit to Loomis Sayles (LS); making sure what they say is what PMFA knows, expects; talked with several individuals and spoke with risk managers who make sure there are not unwanted risks in a portfolio; stable management team, lots of resources to manage accounts; 22% of our portfolio is with L/S; index is very high quality but LS specialty is owning corporate bonds; LS expects long term interest rates to move a little bit higher; optimistic regarding corporate bonds and slow growth environment favors corporate bonds; LS moving some of its holdings to US treasuries; positive but cautious;  Earnest Partners – done well versus benchmark over the long term; returns are very tight so small changes will move EP into a different quartile; 3rd quarter returns slightly below the index and median return of all managers;  Richmond Capital TIPS – inexpensive option – over last few years, hasn’t paid off like they may have liked but by owning TIPS it should adjust to actual inflation; shorter benchmark, lower interest rate risk; good diversification for the portfolio; 3rd quarter returns slightly higher than the index. Olmsted went on to remind the Board per experts recession risk is at least two years out but we should continue to maintain investments in bonds for diversification. Time weighted returns net of fees:  Fiscal year to date through 11/10/17 – 3.67%; annualized - 10.39%  Calendar year to date through 11/10/17 – 9.89%; annualized – 11.58%. No meeting in December. Next regular meeting: Tuesday, January 16 at 10:00 a.m. Meeting adjourned at 11:00 a.m. Respectfully submitted, Gail Budrow-Bradstreet, City Treasurer __________________________________ _________________________________ Board Member signature Board Member signature