Police & Fire Pension

POLICE & FIRE PENSION BOARD MEETING DATE: March 26, 2019 CITY HALL, ROOM 302A TIME: 10:02 A.M. Present: Stan Chubinski, Tammy Giannunzio, Ed Guzzo, and Jake Martin. Absent: Doug Bagwell. Also Present: Jeremy Tollas of Plante Moran Financial Advisors (PMFA); Linda Morrison, Finance Director; and Kourtney Matuschka, Finance Officer/Police & Fire Retirement System Administrator. Chair Chubinski asked for approval of the agenda. Motion Guzzo, seconded Martin to approve the agenda. On a voice vote, motion carried. Presented minutes of the regular meeting and closed session on February 11, 2019. Motion Martin, seconded Giannunzio to approve the minutes as presented. On a voice vote, motion carried. Bank Summary of Assets & Expense Report: As of 2/28/2019, the market value of the portfolio was $144,518,712.45, a gain of $2,225,710.83 since 1/31/2019. As of 3/20/2019, the portfolio market value was $145,807,973.21, which is a gain of $1,289,260.76 since 2/28/2019. For the month of February, the following invoices were authorized by Giannunzio and paid from the Cash Account: Cash Account - Detail Amount Legal Fees 1,584.00 For the month of February, 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 24,822.74 Harding Loevner International 15,609.00 Richmond Capital Management 2,210.00 Robeco Boston Partners SCV 12,078.53 Westfield Capital Management 12,291.35 Lazard Intl Equity 12,100.44 Robeco Boston Partners LCV 12,858.79 Earnest Partners Intermediate 14,625.14 The Boston Company Large Cap Growth 12,410.14 Motion Guzzo, seconded Martin to accept the financial report and quarterly bank summary as submitted. On a voice vote, motion carried.  March 26, 2019 Page 2 of 5 - Official Board Reports Chubinski – none. Giannunzio – Registered Guzzo for MAPERS Spring Conference 5/18 - 5/21. Verified with Martin that we will be available to attend the Fall conference in September. Guzzo – none. Martin – 73 applicants showed up for the first round of testing for Fire Fighters. There was around 150 applicants originally but only 73 paid their fee to apply and continue with the process. This number has significantly decreased from the past. Matuschka  Larry Simpson, Retired Fire Fighter, passed away 2/11/19. His final pro-rated payment for February benefits was paid 3/8/19 ($988.55). His surviving spouse, Iris received a pro-rated payment for February ($916.66) on 3/6/19. Her regular surviving spouse benefits going forward are $1,509.78.  Michael Bradley, Police Officer, retired effective 2/2/19.  The accumulated DROP funds totaling $108,093.94 for Edward Marshall were distributed as $48,093.94 rollover and $60,000.00 to Mr. Marshall. The total DROP contributions were accumulated during the time frame of 2/4/17 – 2/9/19. Total benefits and interest totaled $109,876.75 less 5% of interest earned ($111.43), less early withdrawal penalty of 75% of interest earned (1,671.38).  The following resolutions need approved: VICTORIE L. KERSTEN WHEREAS, the Board of Trustees received an application for duty disability retirement from Victorie L. Kersten on 9/28/2018, and WHEREAS, it was determined by independent medical examination that Victorie L. Kersten, shall be deemed unable to perform the duties of Police Detective making her eligible for retirement pursuant to Section 6(2)(d), Act 345 of the Public Acts of 1937, as amended, and WHEREAS, her benefit pursuant to Section 6(2)(d), Act 345 of the Public Acts of 1937, as amended, shall be 50% of her final average compensation, RESOLVED, that the application of Victorie L. Kersten for duty disability retirement is approved, and RESOLVED, the retirement benefit for Victorie L. Kersten shall commence as of 9/15/2018, and RESOLVED, the gross monthly benefit payable to age 55 is $2,775.49, subject to tax withholdings and any other elective deductions, and RESOLVED, upon reaching age 55, Victorie L. Kersten shall receive a disability retirement pension computed according to Section 6(1)(e) of Act 345 of the Public Acts of 1937, as amended, and RESOLVED, the gross retroactive payment of $15,357.71 was paid on 3/11/2019 and the regular gross monthly benefit shall begin 4/01/2019. March 26, 2019 Page 3 of 5 - Official EDWARD O. MARSHALL WHEREAS, the Board of Trustees is in receipt of an Election of DROP Account Distributions from Edward O. Marshall requesting the distribution be effective on 2/10/2019, and WHEREAS, Edward O. Marshall is eligible for retirement based on his service credit pursuant to Act 345 of the Public Acts of 1937, as amended, a Letter of Understanding between the City of Battle Creek and IAFF Local 335, and the DROP program, and WHEREAS, the original Application for Deferred Retirement Option Plan by Edward O. Marshall required he participate in the program until 2/4/2022, and RESOLVED, that Edward O. Marshall shall exit the DROP program effective 2/10/2019 and shall pay the required penalty for early exit, and RESOLVED, the service retirement benefit for Edward O. Marshall shall commence as of 2/10/2019, and RESOLVED, the gross monthly benefit is $4,445.65 subject to tax withholdings and any other elective deductions, and RESOLVED, the partial payment for 19 days in February is $3,016.69 to be paid on 3/1/2019 and the regular gross monthly benefit shall begin 4/1/2019. CALVIN E. HARDIN WHEREAS, the Board of Trustees is in receipt of an application for participation in the Deferred Retirement Option Plan (DROP) from Calvin E. Hardin requesting an effective retirement date of 11/2/2018, and WHEREAS, Calvin E. Hardin 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 calculation was received, and WHEREAS, Calvin E. Hardin elected straight life with 60% surviving spouse benefit, therefore be it RESOLVED, that the application of Calvin E. Hardin for participation in the DROP is approved, and RESOLVED, the DROP benefit for Calvin E. Hardin shall commence as of 11/2/2018, and RESOLVED, the gross monthly retirement benefit is $5,190.67 and shall be Calvin E. Hardin’s DROP benefit credited monthly to his DROP account and RESOLVED, Calvin E. Hardin’s participation in the DROP shall terminate on 11/1/2023. THERESA A. RIVERA WHEREAS, the Board of Trustees is in receipt of an application for retirement from Theresa A. Rivera requesting an effective retirement date of 1/21/2019, and WHEREAS, Theresa A. Rivera is eligible for retirement based on her service 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, March 26, 2019 Page 4 of 5 - Official WHEREAS, Theresa A. Rivera elected straight life with 60% surviving spouse benefit, therefore be it RESOLVED, that the application of Theresa A. Rivera for retirement is approved, and RESOLVED, the retirement benefit for Theresa A. Rivera shall commence as of 1/21/2019, and RESOLVED, the gross monthly benefit is $4,722.15 subject to tax withholdings and any other elective deductions, and RESOLVED, the gross retroactive payment of $1,675.61 for 11 days in January was paid on 2/15/2019 and the regular gross monthly benefit shall begin 3/1/2019. Motion Martin, seconded Giannunzio to approve the resolution for Victorie L. Kersten, on a voice vote, motion carried. Motion Martin, seconded Giannunizo to approve the resolutions for Edward O. Marshall, Calvin E. Hardin and Theresa A. Rivera, on a voice vote, motion carried. Old Business Handbook Review: Matuschka provided final revisions from previous meeting. Motion Giannunzio, seconded Guzzo to accept the revised Handbook as submitted. On a voice vote, motion carried. New Business Contact Information: Matuschka provided the board with a document requested by the Finance Director and Human Resources Department. This document will be provided to new hires of the Police & Fire Retirement System and it is intended to provide the members with contact information for the Police and Fire Board Representatives, the Administrator, and the city’s website link to the Police & Fire Retirement System Page. Education & Travel Policy: Matuschka provided a draft of revisions to the Education & Travel Policy. The board recommended adding language to require detailed receipts for meal purchases and misc travel reimbursements (tolls, ferries, parking, etc.). The final change is to require Trustees and Administrator to attend a conference once per term/four year and recommend they attend within their first year of appointment. Motion Guzzo, seconded Martin to accept the Education & Travel Policy with recommended changes. Service Retirement Policy & Procedures: Matuschka provided a draft of revisions to the Service Retirement Policy & Procedures. Motion Martin, seconded Giannunzio to accept the revised Service Retirement Policy & Procedures as submitted. On a voice vote, motion carried. March 26, 2019 Page 5 of 5 - Official Change in OSP Pension Benefit: During their last negotiation process, the Battalion Chiefs requested a change in pension benefits to remove the age requirement of 50 years old and request to be eligible for retirement after completion of 25 years, regardless of age. This provision was been adopted by all other units and the city received the proposal from GRS that results in an overall costs increase of 1.65%. The four members of OSP have voted and agreed to pay an additional 1.65% in pension deductions. This change is retroactive back to 7/1/2018. The estimated increase to their deductions was 1% so they started paying 11% effective 9/23/2018 and they paid back the additional 1% from July – September by the end of 2018. Now, the members have until the end of the fiscal year to pay back 0.65% of their pension deductions from July – March 9. Their pension deduction will be increased to 11.65% for the check dated 3/29/19. PMFA – Asset Manager Portfolio Update: Tollas presented the monthly overview of the portfolio as of 2/28/2019.  Federal funds rates recently moved positive after 10 years of negative rates. Do not expect Feds to increase rates in 2019 and possibly expect one increase in 2020. When rates are low, the chances of recession remain low. Rates around 0% are good signs for the economy.  Returns for the total portfolio thru 2/28/2019 were 6.72%, compared to the blended benchmark of 6.86%.  Time weighted returns as follows: o Calendar year to date through 3/13/19: 7.33% in comparison to benchmark of 7.44%. o Fiscal year to date through 3/13/19: 2.28% in comparison to benchmark of 2.96%, annualized to 3.27%; benchmark 4.25%.  No need to raise cash and no recommendation for rebalancing at this time. Public Comment – Linda Morrison addressed paying the P&F annual amortization amount as a flat dollar amount rather than a percent of payroll. She determined it is only beneficial to pay at a flat rate if budgeted payroll is lower than GRS calculation of wages. Since our budgeted payroll is close to GRS expected payroll it would make sense to leave the amortization at a percentage of payroll rather than a flat amount for FY 2020. The city is still early in the budget process but she is hopeful that she will bring budgeted payroll information for FY 2020 to next meeting. Next regular meeting: Wednesday, April 24, 2019 at 10:00 a.m. Meeting adjourned at 11:09 a.m. Respectfully submitted, Kourtney Matuschka, Recording Secretary __________________________________ __________________________________ Board Member signature Board Member signature