Police & Fire Pension

POLICE & FIRE PENSION BOARD MEETING DATE: March 15, 2021 Electronic Zoom Meeting TIME: 1:32 P.M. Present: Stan Chubinski, Tammy Giannunzio, Ed Guzzo, Jake Martin & Chris Rabbitt. Also Present: Justin Cohen and Jeremy Tollas, CAPTRUST; Abra Hill, Gabriel Roeder Smith & Company; Sarah VanWormer, IT Director; Jessica Vanderkolk, Communications Manager; Linda Morrison, Revenue Services Director; and Kourtney Matuschka, Finance Officer/Police & Fire Retirement System Administrator. Chair Chubinski asked for approval of the agenda. Motion Martin, seconded Giannunzio to approve the agenda. On a voice vote, motion carried. Presented minutes of the regular meeting on February 16, 2021. Motion Rabbitt, seconded Guzzo to approve the regular session minutes. On a voice vote, motion carried. Bank Summary of Assets & Expense Report: As of 2/28/2021, the market value of the portfolio was $177,493,168 a gain of $2,608,387 from the 1/31/2021 balance. As of 3/11/2021, the portfolio market value was $179,407,650, which is a gain of $1,914,482 since 2/28/2021. For the month of February, the following expenses were deducted. Additional Expense Type Payee Amount Frequency Details Investment Fees Loomis Sayles & Co 27,191.63 Quarterly 10/1 - 12/31/20 Investment Fees Harding Loevner International 32,181.00 Quarterly 1/1 - 3/31/21 Investment Fees Richmond Capital Management 2,552.00 Quarterly 10/1 - 12/31/20 Investment Fees Robeco Boston Partners SCV 28,635.56 Quarterly 10/1 - 12/31/20 Investment Fees Westfield Capital Management 22,471.29 Quarterly 10/1 - 12/31/20 Investment Fees Lazard Intl Equity 15,996.22 Quarterly 1/1 - 3/31/21 Investment Fees Robeco Boston Partners LCV 16,043.33 Quarterly 10/1 - 12/31/20 Investment Fees Earnest Partners Intermediate 16,245.15 Quarterly 10/1 - 12/31/20 Investment Fees Loomis Sayles Large Cap Growth 14,375.00 Quarterly 10/1 - 12/31/20 Total Investment Fees 175,691.18 Misc Fees (asset manager) Misc Admin fees - non investment 677.96 Monthly 2/1 - 2/28/21 Consulting Services CAPTRUST 23,750.00 Quarterly 10/1 - 12/31/20 Administrative Fee City of Battle Creek 2,849.75 Varies 1/1 - 3/31/21 Misc Fees IRS Application Fee 185.00 As Needed Total Admin. Fees 27,462.71 March 15, 2021 Page 2 of 3 - Official Motion Guzzo, seconded Martin to accept the financial report and quarterly bank summary as submitted. On a voice vote, motion carried. Board Reports Chubinski – none. Giannunzio – none. Guzzo – none. Martin – none. Matuschka  Jeremy Belknap and Travis Black, hired as a Police Officers on 2/22/21.  John Hausman exited the DROP with a retirement date effective 2/25/21. Total benefits and interest totaled $280,522.24 less 5% of interest earned ($493.81), less early withdrawal penalty of 10% of interest earned ($987.62). The remaining balance of $279,040.81 was requested to be rolled over payable to Vantagepoint Transfer Agents/457. This payment was issued on 3/1/21. His regular monthly benefit payments of $6,207.61 will begin on 4/1/21. An off-cycle payment dated 3/4/21 for $886.81 reflects a pro-rated portion for February (4 days). Rabbitt – none. Old Business Final Average Compensation Policy: Matuschka presented final copy for the Board to review. Motion Guzzo, seconded Giannunzio to accept the Final Average Compensation Policy as submitted. On a voice vote, motion carried. Domestic Relations Order Policy: Matuschka presented final copy for the Board to review. Motion Martin, seconded Rabbitt to accept the Domestic Relations Order Policy as submitted. On a voice vote, motion carried. New Business GRS – Actuarial Valuation Presentation 6/30/2020  The Retirement System is made up of 3 components: member contributions, city contributions and investment income.  The overall increase for the city contribution percentage was .43%. Fiscal year 2022 is 35.60% in comparison to 35.17% in fiscal year 2021.  Funded ratio of the plan is 75.7%, well above the state requirement of 60%.  Investment experience for 6/30/20 was unfavorable with a return of 5.91% in comparison with the assumed rate of return of 6.5%.  Recommendation for an experience study prior to next actuarial valuation report. Last study was done March 2015. Mortality tables and investment assumptions are the main items that will change as a result of an experience study. March 15, 2021 Page 3 of 3 - Official CAPTRUST – Asset Manager Portfolio Update: Tollas presented a market update through February.  S&P 500 up 2.76% for the month of February and was up 5.5% through last week.  Small Cap up 6.23% for the month of February and was up over 18% through last week.  International Stocks were up 4% through last week. Cohen proposed the following rebalancing recommendations based on 3/11/21 balances.  Selling 12 million in equities: 3 million from Harding Loevner International, 5 million from Robeco Small Cap Value and 4 million from Robeco Large Cap Value. Purchase 5 million with Loomis Sayles Fixed Income, 3 million with Earnest Partners Intermediate Bonds and 1 million with Richmond TIPS. The remaining 3 million will be allocated to the cash account for future benefit payments. Motion Guzzo, seconded Giannunzio to accept the proposal for rebalancing as proposed by CAPTRUST. On a voice vote, motion carried.  Total portfolio returns for February were 1.69% vs. benchmark of 1.25%. Public Comment – none. Next regular meeting: Monday, April 12, 2021 at 1:30 p.m. Motion Giannunzio, seconded Martin to enter into closed session to review Jason Crape's disability re-examination pursuant to MCL 15.268(h), which is exempted from discussion due to privacy, pursuant to MCL 15.243(1)(a) (2:54 p.m.). On a voice vote, motion carried. Board returned from closed session at 3:04 p.m. Motion, Martin, seconded Giannunzio to accept the medical examiner’s report and continue disability benefit payments to Jason Crape. On a voice vote, motion carried. Meeting adjourned at 3:06 p.m. Respectfully submitted, Kourtney Matuschka, Recording Secretary __________________________________ __________________________________ Board Member signature Board Member signature