Police & Fire Pension

POLICE & FIRE PENSION BOARD MEETING DATE: October 21, 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: Dori Drayton 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 Guzzo, seconded Martin to approve the agenda. On a voice vote, motion carried. Presented minutes of the regular meeting on September 16, 2019. Motion Bagwell, seconded Guzzo to approve the minutes as presented. On a voice vote, motion carried. Bank Summary of Assets & Expense Report: As of 9/30/2019, the market value of the portfolio was $150,400,551 a gain of $873,692 since 8/31/2019. As of 10/17/2019, the portfolio market value was $150,371,671, which is a loss of $28,880 since 9/30/2019. For the month of September, the following invoices were authorized by Giannunzio and paid from the Cash Account: Administrative Fees 2,000.00 Consulting Services 23,750.00 Motion Bagwell, seconded Giannunzio to accept the financial report and quarterly bank summary as submitted. On a voice vote, motion carried. Board Reports Bagwell – 2 new hires and potential retirement in January. Chubinski – none. Giannunzio – Presented Martin’s reimbursement for travel expenses for MAPERS conference and reimbursement to city for use of p-card for registration. Guzzo – none. Martin – Barnes purchased 12 months of military time. MAPERS Conference update:  Definition of Annuity Withdrawal is when the member chooses to withdraw a lump sum of cash, not to exceed employee contribution total, upon retirement. The member’s monthly benefit will be calculated at reduced rate during actuarial calculation.  Service credit purchase: Members can use 457 funds for military purchase cost or to pay back contributions if re-hired. October 21, 2019 Page 2 of 3 - Official  Suggestion to create a New Trustee Handbook. This handbook should include Act 345, plan documents, collective bargaining agreements and plan policies.  PA 202 recap: Experience study every 5 years and every 8 years change actuaries or have an audit of annual valuation. There are 3 types of audits that will comply with PA 202: o Full Replication – when the new actuary completely recalculates annual valuation and we compare to our original valuation results. o Sampling Method – less comprehensive because they use a sample group of participants. o Review of Report – no calculations are done but they review the data presented by original actuary firm which might include 1-3 years of valuation reports and experience study. Matuschka  Terminations: Richard Teinert, Fire Fighter entered DROP effective 9/23/19.  New Hires: James Basner & Patrick Herson hired as Police Officers effective 10/7/19. Motion Guzzo, seconded Giannunzio to reimburse Jake Martin and the City of Battle Creek for MAPERS conference expenses. On a voice vote, motion carried. New Business PMFA – Asset Manager Portfolio Update: Drayton presented an overview of the portfolio and an economic update through September.  The US economy recorded a revised GDP at 2% instead of 2.1% and consumer spending reflected 4.7%.  Global manufacturing data appears very weak and fell short of expectations.  Consumer confidence fell slightly in August.  Both Robeco LCV and Boston LCG are underperforming compared to benchmarks, next month PMFA will discuss.  Time weighted returns as follows: o Calendar year to date through 9/30/19, 13.12% in comparison to benchmark of 13.64%. o Fiscal year to date through 9/30/19, .92% in comparison to benchmark of 1.22%. There is a need to raise cash and the rebalancing was proposed by PMFA.  $1 Million removed from WAM Index 500 and Loomis Sayles Fixed Income.  $1.5 Million removed from Boston Company LCG. Motion Bagwell, seconded Guzzo to raise cash as proposed. On a voice vote, motion carried. Drayton also reported the following organizational changes with two asset managers:  Retirement of Kurt Wagner, portfolio manager in Loomis Sayles. PMFA will monitor to see how they are performing after his departure in August of 2020. No concerns at this point. October 21, 2019 Page 3 of 3 - Official  Boston Partners reported that Mark Donovan is stepping down as Co-CEO. PMFA will also monitor and may follow up with a site visit. There will no changes to the investment team or their processes. No concerns at this time. As requested at a prior meeting, PMFA has updated signature requirements to include a dual approval for all rebalancing requests. Going forward, primary signers are Chairman Chubinski and Giannunzio, City Treasurer. Secondary signer will be Vice Chairman Guzzo. PMFA will review investment policy for next meeting. Public Comment – Linda Morrison reported the start date of PA 202 was 12/31/2017. The city’s MERS plans will be underfunded based on PA 202 requirements but Police and Fire Pension should not be below the state’s requirement. MERS is in the process of an experience study. As a result, MERS will be using different assumptions that will have an impact on the plan’s funding levels. The city held two commission workshops regarding legacy costs. The plans to address legacy costs are to increase employee contributions to pension plans without reducing employer contributions. The city will not changing pension benefits for folks that are currently retired. Changes approved at legacy committee will be presented to commission at one of the November Commission meetings. No future meetings scheduled for legacy committee. Next regular meeting: Monday, November 18, 2019 at 10:00 a.m. Meeting adjourned at 10:56 a.m. Respectfully submitted, Kourtney Matuschka, Recording Secretary __________________________________ __________________________________ Board Member signature Board Member signature