Police & Fire Pension

POLICE & FIRE PENSION BOARD MEETING DATE: June 11, 2019 CITY HALL, ROOM 302A TIME: 10:00 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. Chair Chubinski asked for approval of the agenda. Motion Bagwell, seconded Guzzo to approve the agenda. On a voice vote, motion carried. Presented minutes of the regular meeting on May 13, 2019. Motion Guzzo, seconded Bagwell to approve the minutes as presented. On a voice vote, motion carried. Bank Summary of Assets & Expense Report: As of 5/31/2019, the market value of the portfolio was $144,725,712.25, a loss of $4,766,691.25 since 4/30/2019. As of 6/7/2019, the portfolio market value was $146,781,909.71, which is a gain of $2,056,197.46 since 5/31/2019. For the month of May, the following invoices were authorized by Giannunzio and paid from the Cash Account: Cash Account - Detail Amount Legal Fees 486.00 For the month of May, 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 25,590.44 Harding Loevner International 17,228.00 Richmond Capital Management 2,268.00 Robeco Boston Partners SCV 13,570.36 Westfield Capital Management 14,903.03 Lazard Intl Equity 13,278.80 Robeco Boston Partners LCV 14,070.44 Earnest Partners Intermediate 14,892.85 The Boston Company Large Cap Growth 14,520.00 Motion Guzzo, seconded Bagwell to accept the financial report and quarterly bank summary as submitted. On a voice vote, motion carried. June 11, 2019 Page 2 of 4 - Official Board Reports Bagwell – Third new hire starting next month. They interviewed 12 people and 8 advanced to the next stage. Chubinski – Requested an update regarding fiduciary insurance. Tollas does not see other clients with defined benefit plans carrying fiduciary insurance. Morrison mentioned that the city might not purchase a policy, but may offer reassurance that the city will back and support board trustees. Giannunzio – Shared the request to reimburse the city for MAPERS conference fees including $300 registration and $369.36 for hotel expenses. Also provided a reimbursement request for Ed Guzzo’s mileage $266.80. Guzzo – Provided a MAPERS Report. Key points to consider for trustees, if a member asks you a question, have them put their question in writing and review policies before answering their question. Read meeting minutes prior to approving. Minutes are the legal record stating actions taken and it is the responsibility of each trustee to agree to the information in the minutes. Fiduciary Liability Insurance should have a non-recourse rider that makes sure the insurance company cannot come back at the trustees. Martin – none. Matuschka  Rebeca Tani, Police Officer terminated employment 5/22/2019.  New Hires: Benjamin Shippell and Tylon Dilling were hired as Police Officers effective 5/28/2019.  The following resolutions need to be approved by the board: Matthew J. Beauchamp v Kimberly A. Beauchamp Kalamazoo County Circuit Court – Case No. 18-6002-DO WHEREAS, the Board of Trustees is in receipt of an Eligible Domestic Relations Order (“EDRO”) dated August 6, 2018 wherein the Alternate Payee, Kimberly A. Beauchamp, is awarded certain rights to the benefits of the Participant, Matthew J. Beauchamp, and WHEREAS, the Alternate Payee is entitled to claim a portion of the Participant’s retirement benefits from the Retirement System, and WHEREAS, the payments from the plan to the Alternate Payee shall begin with the Participant commences benefits from the Retirement System, and WHEREAS, said mater had been discussed with legal counsel who has opined that the applicable terms of said court order are consistent with the provisions of the Retirement System and applicable law including Public Act 46 of 1991 (MCLA 38.1701) as applicable, therefore be it June 11, 2019 Page 3 of 4 - Official RESOLVED, that the Board acknowledges receipt of said court order, will pay pension benefits consistent with said order subject to an application being filed by the Participant to commence benefits, and further RESOLVED, that upon application of the Participant this file be forwarded to the Board’s actuary for calculation of the benefits, and further RESOLVED, that a copy of this resolution be immediately attached to the top sheet of the pension file and other appropriate records be kept for the Retirement System relative to this matter, and RESOLVED, that copies of this resolution be sent to Matthew J. Beauchamp, the Participant; Kimberly A. Beauchamp, the Alternate Payee; and the Board’s actuary. BRADLEY G. DUCK WHEREAS, the Board of Trustees is in receipt of an application for retirement from Bradley G. Duck requesting an effective retirement date of 4/11/2019, and WHEREAS, Bradley G. Duck is eligible for retirement based on his 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, WHEREAS, Bradley G. Duck elected straight life with 60% surviving spouse benefit, therefore be it RESOLVED, that the application of Bradley G. Duck for retirement is approved, and RESOLVED, the retirement benefit for Bradley G. Duck shall commence as of 4/11/2019, and RESOLVED, the gross monthly benefit is $4,533.14 subject to tax withholdings and any other elective deductions, and RESOLVED, the gross retroactive payment of $3,022.10 for 20 days in April was paid on 5/10/2019 and the regular gross monthly benefit shall begin 6/1/2019. Motion Martin, seconded Giannunzio to approve the EDRO Resolution for Matthew Beauchamp. On a voice vote, motion carried. Motion Bagwell, seconded Martin to approve the resolution for Bradley G. Duck. On a voice vote, motion carried. New Business Corrections of Errors Policy: Revision needed to explain the notification procedure. The Board determined to call and mail a letter upon discovery of the error. If no response, then certified letter will be sent with Board option of correction. Motion Guzzo, seconded Giannunzio to accept the Corrections of Errors Policy with the revision mentioned. On a voice vote, motion carried. June 11, 2019 Page 4 of 4 - Official FY 2019/2020 Budget: Matuschka presented the fiscal year 2019/2020 Budget and highlighted areas changed from prior year as follows: Employer Contributions figure from the total millage calculated by the city, less $500,000 recorded as Health Contribution Revenue. Expense increases to Benefit Payments based upon current year actual and Memberships increased slightly from prior year. All other revenues and expenses remained the same from prior year. Discussion regarding interest versus dividends and the cost of investment management fees. PMFA will attempt to provide investment fee comparison, or the board could hire an independent firm to research fees. Motion Bagwell, seconded Martin to accept the 2019/2020 Budget as presented. On a voice vote, motion carried. PMFA – Asset Manager Portfolio Update: Tollas presented an overview of the portfolio based on month ending May 31, 2019.  Near term risks include trade tensions, rising labor & materials costs and slowed growth. Earning growth peaked in 3rd quarter of 2018.  When comparing the past two decades, plans must take a larger risk to return the same-targeted return of 7%. In 1999, a plan only needed 18% of the investments in domestic equities and in 2019 they would need to have 60% to show the same return.  S&P up 15.68% for the first week in June.  Time weighted returns as follows: o Calendar year to date through 5/31/19: 7.60% in comparison to benchmark of 7.68%. o Fiscal year to date through 5/31/19: 2.54% in comparison to benchmark of 3.19%, annualized to 2.77%; benchmark 3.48%.  No rebalancing needed at this time. Public Comment – Morrison shared the city has been notified that MERS announced a reduction from 7.75% to 7.35% on their investment rate of return and wage inflation decreased from 3.75% to 3%. Legacy costs committee information is available on the city’s website. Included in the committee’s recommendation is to fund military purchase thru the millage for the next fiscal year and they have determined target employee contributions going forward. Next regular meeting: Friday, July 26, 2019 at 10:00 a.m. Meeting adjourned at 11:22 a.m. Respectfully submitted, Kourtney Matuschka, Recording Secretary __________________________________ __________________________________ Board Member signature Board Member signature