Police & Fire Pension

POLICE & FIRE PENSION BOARD MEETING DATE: December 16, 2019 CITY HALL, ROOM 302A TIME: 10:00 A.M. Present: Stan Chubinski, Tammy Giannunzio, Ed Guzzo and Jake Martin. Absent: Doug Bagwell Also Present: Justin Cohen of Plante Moran Financial Advisors (PMFA); Dori Drayton of PMFA (via conference call); Linda Morrison, Revenue Services Director and Kourtney Matuschka, Finance Officer/Police & Fire Retirement System Administrator. Chair Chubinski asked for approval of the agenda with the revision to have PMFA present first. Motion Guzzo, seconded Martin to approve the agenda. On a voice vote, motion carried. New Business PMFA – Asset Manager Portfolio Update: Drayton provided an economic update.  US economy in quarter 3 reflects GDP at 2.1% stronger than original estimate of 1.9%.  Manufacturing Index fell to 48.1 in November anything below 50 indicates contraction.  Consumer confidence slipped for the 4th consecutive month, still high in comparison to historical readings.  Jobless rate fell to 3.5% in November.  Recap and comparison between Boston/Mellon, Loomis Sayles and Winslow Large Cap Growth investment managers. PMFA recommends switching managers to Loomis Sayles and ending the relationship with Boston/Mellon Company. Motion Guzzo, seconded Martin to approve switching investment managers to Loomis Sayles Large Cap Growth from Boston Company. On a voice vote, motion carried.  PMFA is still implementing new portfolio accounting software package. They are currently running parallel process between both programs. Cohen provided an update on the portfolio balances as of 12/6/19.  Account balances totaled $154,728,616 and provided a breakdown by account. Up over 4 million since quarter ending 9/30/19.  Activity summary reflects the plan is up over 4 million since 7/1/19.  Discussed current allocation vs target allocation and the differences.  Guzzo asked if PMFA would provide the board with the performance summary used in the prior software. Cohen said they will still provide the report and should be up- to-date as there will be a daily feed from Comerica Bank. Drayton provided a copy of the Investment Advisory Agreement. No revisions made since the signing of this contract in 2017. A draft of the Investment Policy Statement was presented. This is not a legal document but a fiduciary list of responsibilities and best practices. December 16, 2019 Page 2 of 4 - Official o Condensed the language under responsibilities. o Same for custodian references and additional specialists. o Statement of objectives revised in order to comply with PA 314. o Asset allocation constraints, discusses rebalancing at 5 percentage points or more than 20% by sub asset class in comparison to the target allocation. o Implementation guidelines only lists a few criteria, but PMFA has significant additional criteria. o Reporting & Monitoring – actuarial policy broad and brief. o Board will review the Investment Policy before the next meeting. Next regular meeting: Tuesday, February 18, 2020 at 10:00 a.m. Presented minutes of the regular meeting and closed session on November 18, 2019. One revision to expand all references to legal counsel to reflect the attorney’s name of VanOverbeke, Michaud & Timmony, P.C. Motion Martin, seconded Giannunzio to approve the regular and closed session minutes with the above mentioned revision. On a voice vote, motion carried. Bank Summary of Assets & Expense Report: As of 11/30/2019, the market value of the portfolio was $154,607,308, a gain of $2,302,233 over the 10/31/2019 balance. As of 12/12/2019, the portfolio market value was $154,433,357, which is a loss of $173,951 since 11/30/2019. For the month of November, the following invoices were authorized by Giannunzio. Expense Type Payee Amount Frequency Additional Details Investment Fees Loomis Sayles & Co 26,972.54 Quarterly 7/1 - 9/30/19 Investment Fees Harding Loevner International 17,375.00 Quarterly 10/1 - 12/31/19 Investment Fees Richmond Capital Management 2,341.00 Quarterly 7/1 - 9/30/19 Investment Fees Robeco Boston Partners SCV 14,558.01 Quarterly 7/1 - 9/30/19 Investment Fees Westfield Capital Management 15,756.52 Quarterly 7/1 - 9/30/19 Investment Fees Lazard Intl Equity 13,613.56 Quarterly 10/1 - 12/31/19 Investment Fees Robeco Boston Partners LCV 14,729.34 Quarterly 7/1 - 9/30/19 Investment Fees Earnest Partners Intermediate 15,501.86 Quarterly 7/1 - 9/30/19 Investment Fees The Boston Company Large Cap Growth 14,731.01 Quarterly 7/1 - 9/30/19 Legal Fees VanOverbeke, Michaud & Timmony, P.C. 328.50 Quarterly 4/1 - 9/30/19 Additional Notes: Attorney's invoice contained $54 for an update regarding the Michigan retirement healthcare case; other charges are regarding EDRO and will be reimbursed by member and/or alternate payee upon approval of EDRO. Motion Martin, seconded Giannunzio to accept the financial report and quarterly bank summary as submitted. On a voice vote, motion carried. December 16, 2019 Page 3 of 4 - Official Board Reports Chubinski – none. Giannunzio – none. Guzzo – none. Martin – none. Matuschka  Surviving Spouse, Bernice Yarger died 11/14/19. Reversed 12/1/19 payment and replaced with a prorated final benefit payment of $336.00 (for 14 days in November) paid 12/3/19.  Bagwell received a call regarding Glenn Castle, retiree from the Police Department. Date of death recorded to be 11/15/19, no obituary published and no death record received. Working with bank to verify death information received from Social Security Administration. He did not appear on the bank’s deceased report. Will reach out to county health department to request a death certificate. Once his death has been confirmed, will work with the bank to pull back all over payments and issue pro-rated final benefit payment.  Shea Peters, Fire Fighter, resigned effective 8/1/19, rolled over his contributions including interest totaling $25,341.48 paid 12/11/19.  The following resolution needs approved: RE: State Treasurer v. Roy C. Rolfe, Sr., et al. Calhoun County Circuit Court Case No. 19-3335-CZ WHEREAS, the Board of Trustees is in receipt of an Ex Parte Order (the “Order”) in the above referenced matter, dated November 15, 2019, and WHEREAS, pursuant to the Order, the Calhoun County Circuit Court has ordered that the Pension System place a freeze over Roy C. Rolfe, Sr.’s pension payments and prevent the disposal of any portion of the asset, and WHEREAS, the payments from the plan to Mr. Rolfe, Sr. shall therefore cease for the duration of the court proceeding against Mr. Rolfe, Sr., and WHEREAS, said matter had been discussed with legal counsel who has opined that the applicable terms of said court order are consistent with the provision of the Pension System and applicable law including Public Act 46 of 1991 (MCLA 38.1701) as amended, therefore be it RESOLVED, that the Board acknowledges receipt of said court order, will cease payment of pension benefits consistent with said order, and further RESOLVED, that a copy of this resolution be immediately attached as the top sheet of the pension file and other appropriate records be kept for the Pension System relative to this matter, and that a copy be sent to Mr. Roy C. Rolfe, Sr.. Motion Martin, seconded Guzzo to accept the resolution for Roy Rolfe. On a voice vote, motion carried. Old Business Tax Reclaims: Matuschka shared email from Comerica Bank with legal counsel, have not received a response yet. December 16, 2019 Page 4 of 4 - Official New Business (continued) 2020 Meeting Schedule: Matuschka presented the 2020 Meeting Schedule. Adjust the schedule to reflect the cancellation of January meeting. Public Comment – Linda Morrison discussed a resolution on the agenda for the next commission meeting regarding legacy costs. All items listed become effective 7/1/2020. Include city’s portion of military purchases in the next fiscal year rather than spreading that cost over 20 years. The city also received the draft of audited financial documents and completed Form 5572, 3rd year the city is required to complete. Meeting adjourned at 10:58 a.m. Respectfully submitted, Kourtney Matuschka, Recording Secretary __________________________________ __________________________________ Board Member signature Board Member signature