Police & Fire Pension

POLICE & FIRE PENSION BOARD MEETING DATE: NOVEMBER 25, 2024 CITY HALL, ROOM 302A TIME: 1:30 P.M. Present: Stan Chubinski, Jake Martin, Chris Rabbitt, Josita Todd, and Tammy Wolfersberger. Also Present: Lily Vardell (Police & Fire Pension Administrator), Justin Cohen (CAPTRUST), Aaron Kuhn (Revenue Services Director), Scott Eager (POLC Labor Council), Brandin Huggett (POLC Union), and Michelle Hull (Human Resources Director.) Chair Chubinski asked for approval of the agenda. Motion Todd, seconded by Wolfersberger. On a voice vote, motion carried. Presented minutes of the regular meeting from October 28, 2024. Motion Martin, seconded by Todd to approve the regular meeting minutes from October 28, 2024. On a voice vote, motion carried. Bank Summary of Assets & Expense Reports for October: As of 10/31/2024, the market value of the portfolio was $190,139,526.34, a loss of $4,838,446.06 from the 9/30/2024 balance. For the month of October, the following expenses were deducted: Expense Type Payee Amount Frequency Additional Details Investment Fees Loomis Sayles & Co 36,223.15 Quarterly 7/1/24‐9/30/24 Total Investment Fees 36,223.15 Cash Management Fees Comerica Bank 596.28 Monthly 8/31/24‐9/30/24 Consulting Services CAPTRUST 23,750.00 Quarterly 7/1/24‐9/30/24 Administrative Fee Comerica Bank 12,008.43 Quarterly 6/30/24‐9/30/24 Administrative Fee Loomis 2,871.93 Quarterly 6/30/24‐9/30/24 VanOverbeke, Michaud Legal Fees & Timmony, P.C. 1,738.20 As Needed Legal Svcs 4/1/24‐9/30/24 Independent Medical Medical Fees Evaluations PC 3,225.00 As Needed Disability Exam Cost Misc Fees Comerica Bank 20.00 As Needed x2 Class Action Handling Fees Training/Travel MAPERS 728.85 As Needed MAPERS Conf Reg & Hotel Dep Total Admin. Fees 44,938.69 Motion Rabbitt, seconded by Wolfersberger to accept the financial reports and quarterly bank summaries submitted for October. On a voice vote, motion carried. pg. 1 Board Reports Chubinski – none Martin – none Rabbitt – none Todd –  Working towards MAP Certificate. Will attend the Spring 2025 MAPERS conference to continue working towards this certification. Wolfersberger – none Vardell –  Richard Becker, former Fire Dept employee, passed away 10/31/24: o His 11/1/24 pension benefit paid to him was for benefits earned 10/1/24‐ 10/31/24, so there are no benefit payments to reverse. o No surviving spouse. New Business  Calendar Year 2025 meeting schedule. o Vardell provided a 2025 board meeting schedule, with tentative monthly meetings on the fourth Monday of each month at 1:30pm in City Hall. Will post the 2025 schedule to the Board’s page on the City website.  CAPTRUST: Cohen provided a Q3 2024 quarterly investment report: o Year‐to‐date (as of 9/30/24), U.S. Large Cap Stocks were up 22.1%, U.S. Small Cap Stocks were up 11.2%, Emerging International Stocks were up 17.2%, and U.S. Bonds were up 4.4%. o Growth continues to outperform Value. Year‐to‐date, Growth Large‐Cap was up 24.5% while Value Small‐Cap was up 9.2%. o For 2024, there has been higher yield in short term investments versus long term investments. This is starting to even out. As of 9/30/24, the 1‐year U.S. Treasury Yield was at 3.98% and the 10‐year U.S. Treasury Yield was at 3.81%. o Year‐to‐date (as of 9/30/24), the beginning market value was at $174,831,887 with an ending value of $195,340,260. o Year‐to‐date (as of 9/30/24), the total portfolio performance was up 13.84%. o PIMCO & BlackRock investment portfolios are marked as ‘consider for termination’ in the Q3 report, however, CAPTRUST is not recommending replacing these portfolios at this time. PIMCO is for short yields and pairs well with Loomis. BlackRock is a new portfolio to the Plan. CAPTRUST is keeping an eye on this, but there are no recommendations at this time. Additional information is documented in CAPTRUST’s quarterly report. o In the P&F portfolio’s target allocations, total U.S. Equities is overweight by 3.18%. The Plan also needs to raise cash for upcoming benefit payments. CAPTRUST is recommending the Board reduce U.S. Equities in order to raise cash by $4.5 million to be at the 3% target allocation. pg. 2 Motion Martin, seconded by Todd to sell $4.5 million from Fidelity 500 Index and purchase $4.5 million in the cash account to rebalance the P&F Plan to the 3% target cash allocation. On a voice vote, motion carried. Public Comment:  Scott Eager (POLC Labor Council): The POLC Union disagrees with how the benefit multiplier is calculated for Duty Disability retirees. Act 345 states that while a retiree is collecting Duty Disability pension benefits, they are receiving 50% of their FAC, and being credited for each service year that they are drawing the duty disability benefit. POLC believes that for the years a retiree is receiving disability pension benefits, they should receive their full 3% multiplier that is in their Union Contract. The Board’s policy states they will receive their 3% multiplier for their years worked, and a 2% multiplier for the years they receive a disability pension benefit.  Comment from Chair Chubinski: Has the Board’s attorney reviewed the Disability Policy in reference to POLC’s complaint?  Answer from Vardell: Yes, the Board’s attorney did review and provided an opinion which is in support of the Board’s current policy. This opinion was shared with all Board members and with POLC.  Comment from Eager: The attorney opinion states the Board had the option to adopt the 3% multiplier or create their own guidelines, and the Board chose to create their own guidelines and use the 2% multiplier for the years they receive a disability pension benefit.  Comment from Todd: Can we table this discussion so that the Board can do their historical research on the subject?  Comment from Martin: Was a grievance filed against the City?  Answer from Eager: Yes, a grievance was filed against the City. The Union Contract does not specify a service multiplier from a disability multiplier, so that is the source of confusion. POLC was under the impression the same multiplier would be in effect for both the service and disability multiplier.  Comment from Martin: We will need to also review the Union Contract to understand the wording that is currently in the contract.  Comment from Vardell: If the Board decides to make any changes to the Disability Policy, the Board’s attorney will need to review the changes first. Also, we will have to reach out to the Actuaries to determine if any changes made require a Supplemental Valuation to the Pension Plan.  Comment from Chair Chubinski: We will table this discussion until next meeting so we can research the subject and receive an opinion from the Actuaries. pg. 3   Comment from Hull: From a City perspective, we believe this grievance will proceed to Step 2, which is the City’s Labor Attorney. The Labor Attorney has also reviewed the Board’s Attorney opinion on the subject. Tabled. Board will continue this discussion at their next board meeting. No closed session needed. Next regular meeting: Monday, December 19th at 1:30pm. Meeting adjourned at 2:11pm Respectfully submitted, Lily Vardell, Recording Secretary __________________________________ __________________________________ Board Member signature Board Member signature pg. 4