Police & Fire Pension

POLICE & FIRE PENSION BOARD MEETING DATE: July 26, 2019 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, Revenue Services 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 June 11, 2019. Motion Bagwell, seconded Giannuzio to approve the minutes as presented. On a voice vote, motion carried. Bank Summary of Assets & Expense Report: As of 6/30/2019, the market value of the portfolio was $149,982,787.08, a gain of $5,257,074.83 since 5/31/2019. As of 7/22/2019, the portfolio market value was $150,555,533.22, which is a gain of $572,746.14 since 6/30/2019. For the month of June, the following invoices were authorized by Giannunzio and paid from the Cash Account: Training/Travel Expense 936.16 Health Insurance Invoice 484,051.52 Motion Bagwell, seconded Giannuzio to accept the financial report and quarterly bank summary as submitted. On a voice vote, motion carried. Board Reports Bagwell – Three new hires starting Monday. Background check is out on one more. Chubinski – Joe Wharton passed away had 16 years or service. Review pension file to see if receiving a benefit payment. Giannunzio – Registered Jake for Fall MAPERS Conference 9/21 – 9/24/2019. Guzzo – none. Martin – none. Matuschka  Terminations: James Tuyls retired effective 7/2/2019.  New Hire: Andrew Vandermolen hired as a Police Officer effective 7/15/2019. July 26, 2019 Page 2 of 3 - Official New Business PMFA – Asset Manager Portfolio Update: Tollas presented an overview of the portfolio based on quarter ending 6/30/2019, an economic update through mid-July and a summary of investment manager fees. Investment Fees: Participant plans are following best practices that require the investment company to provide fee schedules to individuals. Pension plans are not under as much watch because the focus is on protecting individual plans. Therefore, it is more difficult to find peer groups to compare investment expense comparisons amongst pension plans.  Callan information provided is the only peer group PMFA was able to find data to compare and they work with larger portfolios. Received a benchmark comparison for billion dollar pension plans and our smaller plan was comparable in investment manager fees.  Tollas suggested to compare all fees against similar sized defined benefit plans to ensure we are comparable to other communities. Matuschka will attempt to research information from other communities.  Tollas stated a RFP is not required on a regular basis for outside services so long as the board determines the services you are receiving are comparable to other companies.  Active manager is worth the additional fees because higher returns offset the higher fees and they react quickly to market changes.  Whole portfolio group review should take place every three years. The board has reviewed individual investment managers, but reviewing the group as a whole has not happened in some time. Tollas recommended the board review this along with the actuarial report during asset allocation. Portfolio Overview & Economic Update: Feds are hinting at rate cut of a .25%. Based on historical data, the small likelihood of a president being re-elected during a recession indicates the president may want to settle trade issues to settle down the economy based on upcoming election.  Robeco Boston large cap performing below benchmark and will review next month.  Calendar Year to Date return for total portfolio through 6/30/19 was 12.09% vs. blended benchmark of 12.26%.  Time weighted returns as follows: o Calendar year to date through 7/12/19: 13.14% in comparison to benchmark of 13.13%. o Fiscal year to date through 6/30/19: 6.82% in comparison to benchmark of 7.58%.  No rebalancing needed at this time. Public Comment – Morrison mentioned an upcoming commission workshop to educate commission on retirement benefits and the legacy costs associated with such benefits. The following workshop will help develop an implementation plan for changes to reduce legacy costs. No discussion regarding changes to pension for retirees. July 26, 2019 Page 3 of 3 - Official Next regular meeting: Monday, August 19, 2019 at 10:00 a.m. Meeting adjourned at 11:01 a.m. Respectfully submitted, Kourtney Matuschka, Recording Secretary __________________________________ __________________________________ Board Member signature Board Member signature