Police & Fire Pension

POLICE & FIRE PENSION BOARD MEETING DATE: December 11, 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: Dori Drayton 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 Martin, seconded Guzzo to approve the agenda. On a voice vote, motion carried. Presented minutes of the regular meeting on November 19, 2018. Motion Martin, seconded Giannunzio to approve the minutes as presented. On a voice vote, motion carried. Bank Summary of Assets & Expense Report: As of 11/30/18, the market value of the portfolio was $140,948,993, a gain of $597,909 since 10/31/18. As of 12/10/2018, the portfolio market value was $137,570,840, which is a loss of $3,378,153 since the prior month end. As requested, a quarterly summary of bank statements was provided to the Board. Guzzo requested to have prior quarter information also provided on quarterly summary. For the month of November, the following invoices were authorized by Giannunzio and paid from the Cash Account: Cash Account - Detail Amount Actuarial Services Fee Administrative Fee Auditing Fee 7,200.00 Consulting Services Invoice Fee Legal Fees Medical Fees Misc Fees Travel/Training Fees 200.00 For the month of November, the following invoices were reviewed by PMFA, authorized by Giannunzio and paid from the appropriate Asset Manager Accounts: Investment Management Fees Amount Harding Loevner International 18,432.00 Lazard Intl Equity 13,723.01 December 11, 2018 Page 2 of 4 - Official Motion Guzzo, seconded Martin to accept the financial report as submitted. On a voice vote, motion carried. Board Reports Bagwell – Two new hires starting Monday December 17, 2018. Chubinski – none. Giannunzio – none. Guzzo – none. Martin – none. Matuschka – Clayton Denney, terminated on 8/23/18, withdrew his contributions including interest totaling $7,841.07 paid 11/29/18. Motion Martin, seconded Bagwell to approve the following resolutions: WHEREAS, the Board of Trustees is in receipt of an application for retirement from David V. Wabindato requesting an effective retirement date of 8/23/18, and WHEREAS, David V. Wabindato is eligible for retirement 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 calculations have been received, therefore be it RESOLVED, that the application of David V. Wabindato for retirement is approved, and RESOLVED, the retirement benefit for David V. Wabindato shall commence as of 8/23/18, and RESOLVED, the gross monthly benefit is $3,499.09 subject to tax withholdings and any other elective deductions, and RESOLVED, the gross retroactive payment of $1,015.87 for 9 days in August was paid on 9/14/18 and the regular gross monthly benefit shall begin 10/1/18. WHEREAS, the Board of Trustees is in receipt of an eligible domestic relations order (EDRO) for David Wabindato and Mary Wabindato, and WHEREAS, Mary Okay (formerly Wabindato), the alternate payee, is eligible for certain benefits pursuant to Public Act 46 of 1991, as amended, and WHEREAS, the EDRO has been accepted by the City of Battle Creek Police and Fire Retirement System Board of Trustees by resolution at its regular meeting on 5/21/12, and WHEREAS, the final actuarial calculations have been received and paid for, therefore be it RESOLVED, the alternate payee EDRO benefit for Mary Okay shall commence as of 8/23/18, and RESOLVED, the gross monthly EDRO benefit is $1,190.98 subject to tax withholdings, and RESOLVED, the gross retroactive EDRO payment of $345.77 for 9 days in August was paid on 9/14/18 and the regular gross monthly EDRO benefit shall begin 10/1/18. On a voice vote, motion carried. December 11, 2018 Page 3 of 4 - Official Old Business Policy Tracking: Matuschka updated Policy Tracking worksheet with a proposed schedule for revisions. Board approves additions and agrees to use Policy Tracking worksheet as a guide for policy review going forward. Disability Policy review: Board reviewed additional corrections to the Disability Policy. Matuschka will make one additional revision regarding Workers Compensation settlement bullet point and will email to Board prior to January meeting. Ethics Policy: Reviewed and no changes required. 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 reviewed the documentation, and agreed to send the revised documentation to members who request to withdrawal their contributions. Motion Bagwell, seconded Martin to approve the following resolution: WHEREAS, the Board of Trustees is vested with the authority and fiduciary responsibility for the administration, management and operation of the Retirement System, and WHEREAS, the Board of Trustees acknowledges that Section 402(f) of the Internal Revenue Code (the “Code”) requires the Board to provide written notice and explanation to recipients of eligible rollover distributions from the Retirement System (hereinafter, the “Safe Harbor Notice”), and WHEREAS, applicable tax law and regulations require said Safe Harbor Notice to be provided within a reasonable period of time in advance of such distributions, and WHEREAS, the Internal Revenue Service recently published Notice 2018-74 which modifies the safe harbor explanations that may be used to satisfy the requirements of Code Section 402(f), and WHEREAS, legal counsel has prepared a revised Safe Harbor Notice consistent with the requirements of Section 402(f) and Notice 2018-74, and WHEREAS, the Board of Trustees has discussed this matter with legal counsel, therefore be it RESOLVED, that the Retirement System is hereby amended to comply with and shall be administered in accordance with the requirements of Notice 2018-74, and further RESOLVED, that the Board of Trustees hereby adopts the revised Safe Harbor Notice consistent with the requirements of Notice 2018-74, and further RESOLVED, that the Safe Harbor Notice be provided to recipients of eligible rollover distributions from the Retirement System consistent with Code Section 402(f), and further RESOLVED, that a copy of this resolution shall be retained in accordance with the Retirement System’s record retention policy and provided to all appropriate parties. On a voice vote, motion carried. December 11, 2018 Page 4 of 4 - Official New Business Meeting Schedule 2019: Historically, monthly board meetings are held on the 3rd Monday of each month. In 2019, the 3rd Monday in January and February fall on holidays where City offices are closed. Alternative dates are scheduled for January 14, 2019 and February 11, 2019. Matuschka will provide board with the annual schedule at the January meeting. PMFA – Asset Manager Portfolio Update:  Drayton presented an overview of the portfolio. She expressed to the Board, during this uncertain economic time, changes are frequent and information quickly becomes outdated.  Earnings for during 2018 offset with the losses incurred during the recent economic climate.  Better than expected job reports, including an increase in wages.  An inverted yield curve is during a time when the 10-year Treasury bond has a lower yield than the 2-year Treasury bond. An inverted yield curve has not always signaled a recession.  Time weighted returns as follows: o Calendar year to date through 11/30/18: -0.29% in comparison to benchmark of -0.32%; annualized to -0.32%; benchmark -0.35% o Fiscal year to date through 11/30/18: -0.76% in comparison to benchmark of -1.82% annualized to -0.47%; benchmark -1.12%  Starting in January 2019 the city will begin submitting the employer contributions on a monthly basis rather than quarterly.  Drayton expressed the need to raise cash and suggested $3,000,000 transferred out of WAM Index 500 to cover cash needs. Motion Guzzo, second Giannunzio to approve the transfer as recommended. On a voice vote, motion carried. Public Comment – Morrison discussed email from City Manager regarding 2.5 million dollar shortfall based on personal property tax elimination and essential service payments. Police and Fire Departments are a large portion of General Fund budget. Expect a news article in the next coming days. Next regular meeting: Monday, January 14, 2019, at 10:00 a.m. Meeting adjourned at 11:12 a.m. Respectfully submitted, Kourtney Matuschka, Recording Secretary __________________________________ __________________________________ Board Member signature Board Member signature