Police & Fire Pension

POLICE & FIRE PENSION BOARD MEETING DATE: NOVEMBER 21, 2022 CITY HALL, ROOM 302A TIME: 1:30 P.M. Present: Stan Chubinski, Tammy Giannunzio, Ed Guzzo, Jake Martin, and Chris Rabbitt. Also Present: Aaron Kuhn (Assistant Revenue Services Director), Lily Vardell (Police & Fire Pension Administrator, Jeremy Tollas (CAPTRUST), Michelle Hull (Human Resources Director.) Chair Chubinski asked for approval of the agenda. Motion Rabbitt, seconded by Giannunzio. On a voice vote, motion carried. Presented minutes of the regular meeting from October 19, 2022. Motion Martin, seconded by Guzzo to approve the regular meeting minutes from October 19, 2022. On a voice vote, motion carried. Bank Summary of Assets & Expense Report: As of 10/31/2022, the market value of the portfolio was $152,757,319.79, a gain of $4,839,382.79 from the 09/30/2022 balance. For the month of October, the following expenses were deducted: Expense Type Payee Amount Frequency Additional Details Administrative Fee Loomis 13.69 As Needed Misc Recovery Expense Consulting Services CAPTRUST 23,750.00 Quarterly 7/1/22-9/30/22 Invoice Fee Comerica Bank 12,000.60 Quarterly 7/1/22-9/30/22 Total Admin. Fees 35,764.29 Motion Guzzo, seconded by Giannunzio to accept the financial reports and quarterly bank summaries submitted for October. On a voice vote, motion carried. Board Reports Chubinski - none Giannunzio – none Guzzo - none Martin – none Rabbitt – notified yesterday of the passing of retired police officer Joe Wilder. He was retired for just over a year. Page 1 of 4 Vardell  William Gensch, Police Sergeant, entered the DROP effective 8/18/22. See resolution below.  Jim Blocker, Police Chief, entered the DROP effective 9/30/22. See resolution below.  Chris Hug, Police Officer, terminated on 10/15/22. Officer Hug is vested with the City. A letter regarding his options for either withdrawal or future pension benefit was sent 11/3/22.  GASB 67/68 report, GRS was able to use the 6.25% without a disclaimer due to the Asset Allocation Change adopted at the last meeting.  Show Board options for searchable resolutions on City Website.  The following two resolutions need approval: WILLIAM T. GENSCH WHEREAS, the Board of Trustees is in receipt of an application for participation in the Deferred Retirement Option Plan (DROP) from William T. Gensch requesting an effective retirement date of 8/18/2022, and WHEREAS, William T. Gensch is eligible for retirement based on his service credit 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, William T. Gensch elected straight life with 60% surviving spouse benefit, therefore be it RESOLVED, that the application of William T. Gensch for participation in the DROP is approved, and RESOLVED, the DROP benefit for William T. Gensch shall commence as of 8/18/2022, and RESOLVED, the gross monthly retirement benefit is $10,682.74 and shall be William T. Gensch’s DROP benefit credited monthly to his DROP account and RESOLVED, William T. Gensch’s participation in the DROP shall terminate on 8/17/2027. JAMES A. BLOCKER WHEREAS, the Board of Trustees is in receipt of an application for participation in the Deferred Retirement Option Plan (DROP) from James A. Blocker requesting an effective retirement date of 9/30/2022, and WHEREAS, James A. Blocker is eligible for retirement based on his service credit 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, James A. Blocker elected straight life with 60% surviving spouse benefit, therefore be it Page 2 of 4 RESOLVED, that the application of James A. Blocker for participation in the DROP is approved, and RESOLVED, the DROP benefit for James A. Blocker shall commence as of 9/30/22, and RESOLVED, the gross monthly retirement benefit is $7,596.87 and shall be James A. Blocker’s DROP benefit credited monthly to his DROP account and RESOLVED, James A. Blocker’s participation in the DROP shall terminate on 9/29/2024. Motion Rabbit, seconded by Martin to accept the DROP resolutions for William Gensch and James Blocker. On a voice vote, motion carried. New Business  2023 Meeting Schedule – All meetings scheduled for the third Monday of each month. If there is a holiday on that day, the meeting will be pushed to Tuesday. Motion Giannunzio, seconded by Guzzo to approve the Meeting Schedule for 2023. On a voice vote, motion carried.  Policy Review – Investment Policy. Jeremy Tollas presented a new Investment Policy Statement: o Policy is very similar to the current Investment Policy as far as its purpose and objectives. o Main change to the policy is to reflect the new Asset Allocation Range of 3% Cash, 32% Fixed Income, and 65% Equities. Motion Martin, seconded by Giannunzio to approve the new Investment Policy that includes the new Asset Allocation. On a voice vote, motion carried.  CAPTRUST: Tollas provided a Third Quarter investment report and an October investment update: o US Large-Cap Stocks down 4.9% for the third Quarter, down 23.9% year-to-date. o US Small-Cap Stocks down 2.2% for the third Quarter, down 25.1% year-to-date. o Energy & Financial Sectors have performed best year-to-date. Mid-Cap Growth has performed the worst. o Substantial increase in interest rates during the third Quarter, especially mortgage rates. Page 3 of 4  o Recommending replacing Goldman Sachs Small Cap Value manager, which currently holds about $4.4 million of the Pension Plan’s investments.  Have underperformed since 2020.  A co-portfolio manager and two analysts have left the team, and they have not found permanent replacements yet.  CAPTRUST is recommending replacing Goldman Sachs Small Cap Value with Allspring Special Small Cap Value, due to Allspring’s long-term performance and experienced management team. Compared to Goldman Sachs, Allspring has a higher 5-year and 10-year return, and a lower Standard Deviation. Motion Guzzo, seconded by Martin to replace Goldman Sachs Small Cap Value manager with Allspring Special Small Cap Value manager. On a voice vote, motion carried. Public Comment - none Next regular meeting: Monday, December 19th at 1:30 PM Meeting adjourned at 2:16pm Respectfully submitted, Lily Vardell, Recording Secretary __________________________________ __________________________________ Board Member signature Board Member signature Page 4 of 4