Police & Fire Pension

POLICE & FIRE PENSION BOARD MEETING DATE: November 19, 2018 CITY HALL, ROOM 302A TIME: 10:02 A.M. Present: Doug Bagwell, Stan Chubinski, Tammy Giannunzio, Ed Guzzo, and Jake Martin. Absent: none. Also Present: Jeremy Tollas of Plante Moran Financial Advisors (PMFA); Linda Morrison, Finance Director; and Kourtney Matuschka, Finance Officer/Police & Fire Retirement System Administrator. Vice Chair Chubinski asked for approval of the agenda. Motion Bagwell, seconded Martin to approve the agenda. On a voice vote, motion carried. Presented minutes of the regular meeting and closed session on October 15, 2018. Motion Martin, seconded Giannunzio to approve the minutes as presented. On a voice vote, motion carried. As of 10/31/18, the market value of the portfolio was $140,351,084, a loss of $6,691,930 since 9/30/18. As of today, the portfolio market value is $140,773,163, which is a gain of $422,079 since the prior month end. For the month of October, the following invoices were authorized by Giannunzio and paid from the Cash Account: Cash Account - Detail Amount Actuarial Services Fee Administrative Fee Auditing Fee Consulting Services Invoice Fee Legal Fees 1,746.00 Medical Fees Misc Fees Travel/Training Fees 1,328.16 For the month of October, the following invoices were reviewed by PMFA, authorized by Giannunzio and paid from the appropriate Asset Manager Accounts: Investment Management Fees Amount Loomis Sayles & Co 24,477.89 Richmond Capital Management 2,214.00 Robeco Boston Partners SCV 14,774.03 Westfield Capital Management 14,584.92 Robeco Boston Partners LCV 14,935.52 Earnest Partners Intermediate 17,226.96 The Boston Company Large Cap Growth 14,817.48 November 19, 2018 Page 2 of 4 - Official Motion Martin, seconded Guzzo to accept the financial report as submitted. On a voice vote, motion carried. Board Reports Bagwell – none Chubinski – none. Giannunzio – none. Guzzo – none. Martin – none. Matuschka  New Hire: Brian Sturdivant, Fire Chief hired on 9/24/18. HR is working on drafting resolution regarding Non-Represented Pension Benefits.  Clayton Denney, terminated on 8/23/18. A letter regarding his options for withdrawal was sent 10/31/18.  Christopher Hug, terminated on 9/18/18. A letter regarding his options for withdrawal and deferred status was sent 10/31/18.  Pending retirements: Theresa Rivera, Calvin Hardin (entered DROP 11/2/18) and Edward Marshall (exiting DROP). Motion Bagwell, seconded Martin to approve the following resolution: WHEREAS, the Board of Trustees is in receipt of an application for retirement from Floyd K. Millikin requesting an effective retirement date of 7/28/18, and WHEREAS, Floyd K. Millikin is eligible for retirement based on his service credit (prior service credit 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 and, WHEREAS, Floyd K. Millikin elected straight life with 60% surviving spouse benefit, therefore be it RESOLVED, that the application of Floyd K. Millikin for retirement is approved, and RESOLVED, the retirement benefit for Floyd K. Millikin shall commence as of 7/28/18, and RESOLVED, the gross monthly benefit is $5,866.83 subject to tax withholdings and any other elective deductions, and RESOLVED, the gross retroactive payment of $757.01 for 4 days in July was paid on 8/17/18 and the regular gross monthly benefit shall begin 9/1/18. On a voice vote, motion carried. Old Business Disability Policy review: Matuschka provided the Board with proposed revisions to the Disability Policy. She also provided a new draft of the Application for Disability Retirement and the Medical Report. All revisions were due to the Board changing the process. They will now determine duty or non-duty disability, after the Disability Application has been November 19, 2018 Page 3 of 4 - Official approved. Future revisions are needed to the policy and the handbook to add language explaining duty disability calculation examples and Workers Comp offset as it pertains to pension benefit payments. PA 345 Vesting Requirements: Matuschka confirmed with legal counsel the vesting for members is indeed 10 years. More specific regarding Chief Sturdivant, he must work until age 65 to retire with benefits payable unless otherwise indicated by City resolution. If he leaves before 65, he is entitled to withdraw his contributions. New Business Policy Summary: Matuschka provided the board with a listing of all known policies, their adoption date and last revised date. The board decided to review the Disability Policy and the Ethics Policy at the next meeting. Over the next year, the board will review each policy and determine the frequency of review. Eligible Rollover Distributions: Legal counsel sent out a revised memo regarding rollover options. They included a document to be provided to members that request withdraw of contributions. The IRS published notice 2018-74 that modified the safe harbor explanations and legal counsel believes the Board should adopt the following resolution to remain in compliance with such updates. The board would like time to review the memo and information provided before they approve the resolution. IME P.C. Recommendation – Matuschka suggested the Board formally appoint Dr. Allan Coates as the Board appointed physician for the current Disability Application. Motion Bagwell seconded Martin to accept Dr. Allan Coates for the Board appointed physician. On a voice vote, motion carried. PMFA Collaboration Site: Matuschka and Giannunzio received an invitation to join PMFA’s collaboration site. This site provides access to PMFA monthly and quarterly reports. Matuschka asked if any board members would like access to the site. All members have requested access to the site, Matuschka will send an email to PMFA to add all members. PMFA – Asset Manager Portfolio Update: Tollas explained how the market had positive returns for every month in 2017. Historically this has not happened for 30 years, so 2017 was an unusual year for continuous growth. He explained it is typical to see market volatility in every calendar year. Since the last couple of months have been unstable, he likes to remind clients why they do not recommend market timing. Historically, the highest growth happens 30-40 days after a large drop. If they attempt to time the market investors may miss a large rebound of growth and compounding growth on that money going forward. The U.S. Economy is still expanding and has continued to grow over the past 9 years. However, economists expect a slowdown in growth but still expect the expansion to last until 2020. Year to date returns through October 31, resulted in a total portfolio loss of 1.29% due to interest rates rising and bond returns decreasing during this time. While the bonds are November 19, 2018 Page 4 of 4 - Official showing a negative YTD return, they are still outperforming the index. US equities are still doing well, and international equities are down through October. Time weighted returns as follows:  Calendar year to date through 11/1/18: -0.55% in comparison to benchmark of - 0.87%; annualized to -0.66%; benchmark -1.04%  Fiscal year to date through 11/1/18: -1.02% in comparison to benchmark of -2.98% annualized to -1.02%; benchmark -2.96%  No recommended change in asset allocation Public Comment – none. Next regular meeting: Tuesday, December 11, at 10:00 a.m. Meeting adjourned at 11:11 a.m. Respectfully submitted, Kourtney Matuschka, Recording Secretary __________________________________ __________________________________ Board Member signature Board Member signature