Police & Fire Pension

POLICE & FIRE PENSION BOARD MEETING DATE: APRIL 25, 2025 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), Aaron Kuhn (Revenue Services Director), and Justin Cohen (CAPTRUST). Chair Chubinski asked for approval of the agenda. Motion Martin, seconded by Todd. On a voice vote, motion carried. Presented minutes of the regular meeting from March 3, 2025. Motion Todd, seconded by Wolfersberger to approve the regular meeting minutes from March 3, 2025. On a voice vote, motion carried. Bank Summary of Assets & Expense Reports for February and March: As of 2/28/2025, the market value of the portfolio was $195,155,266.86, a loss of $706,554.88 from the 1/31/2025 balance. For the month of February, the following expenses were deducted: Expense Type Payee Amount Frequency Additional Details Cash Management Fees Loomis 108.57 Monthly 12/31/24‐1/31/25 Cash Management Fees Comerica Bank 1,121.91 Monthly 12/31/24‐1/31/25 Misc Fees Comerica Bank 10.00 As Needed x1 Class Action Handling Fee Total Admin. Fees 1,240.48 As of 3/31/2025, the market value of the portfolio was $187,877,630.15, a loss of $7,277,636.71 from the 2/28/2025 balance. For the month of March, the following expenses were deducted: Expense Type Payee Amount Frequency Additional Details Administrative Fee City of Battle Creek 3,300.00 Quarterly 10/1/24‐12/31/24 Cash Management Fees Loomis 161.57 Monthly 1/31/25‐2/28/25 Cash Management Fees Comerica Bank 1,007.74 Monthly 1/31/25‐2/28/25 Legal Fees VanOverbeke, Michaud & Timmony, P.C. 3,912.30 As Needed Legal Svcs 10/1/24‐12/31/24 MAPERS Fall Conference MAPERS 350.00 As Needed MAPERS Spring Conf Charge Misc Fees Comerica Bank 30.00 As Needed x3 Class Action Handling Fees Total Admin. Fees 8,761.61 pg. 1 Motion Martin, seconded by Rabbitt to accept the financial reports and quarterly bank summaries submitted for February and March. On a voice vote, motion carried. Board Reports Chubinski – none Martin – none Rabbitt – none Todd – none Wolfersberger – none Vardell –  Mike Fleisher exited the DROP with a retirement date effective 2/22/25: o Benefits and interest totaled $255,382.46 o $281.92 was withheld for admin costs (5%) o $4,228.79 was withheld for early withdrawal penalty (75%) o $250,871.75 was rolled over payable to Mission Square Retirement. This payment was issued on 2/28/25. o EDRO was calculated by actuaries on 1/24/25 and resolution is below.  David Wuis, former Firefighter who terminated 2/26/24, withdrew his contributions via rollover, totaling $69,404.79 on 4/14/25.  Stan Chubinski’s term as the Board Chair on the P&F Pension Board was set to expire on 6/30/25. On 4/15/25, the Commission approved his re‐appointment for another four‐ year term of 7/1/25‐6/30/29 (Resolution #107.)  Two resolutions need approval: MICHAEL P. FLEISHER, BATTALION CHIEF – EDRO & DROP WHEREAS, the Board of Trustees is in receipt of an application for participation in the Deferred Retirement Option Plan (DROP) from Michael P. Fleisher requesting an effective retirement date of 11/16/2022, and WHEREAS, Michael P. Fleisher 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 calculations have been received, therefore be it RESOLVED, that the application of Michael P. Fleisher for participation in the DROP is approved, and RESOLVED, the DROP benefit for Michael P. Fleisher shall commence as of 11/16/22, and RESOLVED, the gross monthly DROP benefit is $9,164.92 and shall be Michael P. Fleisher’s DROP benefit credited monthly to his DROP account and RESOLVED, Michael P. Fleisher’s participation in the DROP shall terminate on 11/15/27. WHEREAS, the Board of Trustees is in receipt of an eligible domestic relations order (EDRO) for Michael P. Fleisher and Leah D. Fleisher, and pg. 2 WHEREAS, Leah D. Fleisher, the alternate payee, is eligible for certain benefits pursuant to Public Act 46 of 1991, as amended, and WHEREAS, the EDRO has been accepted by the City of Battle Creek Police and Fire Retirement System Board of Trustees by resolution at its regular meeting on 7/21/2014, and WHEREAS, the final actuarial calculations have been received and paid for, therefore be it RESOLVED, the alternate payee EDRO benefit for Leah D. Fleisher shall commence as of 3/1/25, and RESOLVED, the gross monthly EDRO benefit for Leah D. Fleisher is $1,890.52, subject to tax withholdings, and RESOLVED, the gross monthly retirement benefit for Michael P. Fleisher has been reduced to $7,274.40, subject to tax withholdings. Motion Martin, seconded by Todd to approve the EDRO and DROP resolutions for Michael Fleisher. On a voice vote, motion carried. JAMES G. MARTENS, POLICE LIEUTENANT ‐ DROP WHEREAS, the Board of Trustees is in receipt of an application for participation in the Deferred Retirement Option Plan (DROP) from James G. Martens requesting an effective retirement date of 2/2/2025, and WHEREAS, James G. Martens 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 G. Martens elected Option A with 100% beneficiary benefit, with a beneficiary selected of spouse, therefore be it RESOLVED, that the application of James G. Martens for participation in the DROP is approved, and RESOLVED, the DROP benefit for James G. Martens shall commence as of 2/2/25, and RESOLVED, the gross monthly retirement benefit is $9,231.77 and shall be James G. Marten’s DROP benefit credited monthly to his DROP account and RESOLVED, James G. Marten’s participation in the DROP shall terminate on 2/1/2030. Motion Rabbitt, seconded by Wolfersberger to approve the DROP resolution for James Martens. On a voice vote, motion carried. Old Business  Update on Duty Disability Retirement dispute: o On 4/9/25, a settlement was reached between the City and Scott Marshall regarding Mr. Marshall’s Duty Disability Retirement. The Grievance Settlement is as follows: pg. 3 WHEREAS, the City of Battle Creek, (hereinafter, "City") and the Police Officers Labor Council, (hereinafter, "Union") are parties to a collective bargaining agreement which expires on June 30, 2027. WHEREAS, the Union filed Grievance No. 24‐76 regarding the application of duty disability retirement to former bargaining unit member Scott Marshall,(hereinafter, "Grievant"). WHEREAS, the matter proceeded to arbitration before Arbitrator Mark Glazer which was scheduled to be heard on April 9, 2025. WHEREAS, the parties have agreed to engage in discussions to amicably resolve the matter. NOW, THEREFORE, BE IT RESOLVED, the parties agree as follows: 1. The City and Union agree that the attached Appendix B shall be affixed to the current collective bargaining agreement and incorporated into Article 14, Retirement Plan upon the expiration of the current contract. 2. The calculation method in Appendix B shall be applied to the Grievant's duty disability pension calculation as well as former bargaining unit member Brandon Hultink. 3. The City and the Union agree that the Union shall withdraw Grievance No. 24‐76 and Grievance No. 25‐04 will be resolved based on the City's Step 2 response. 4. The City and Union agree that they shall split the cost for Arbitrator Mark Glazer in one equal half amounts. 5. The City and Union agree that the attached Appendix shall be precedential setting for future claims for non‐duty and duty disability retirements. 6. This shall be the entire agreement between the parties as it relates to the above‐referenced claims and the grievances contained herein. APPENDIX B: The City and Union agree that Article 14, Retirement Plan in the parties' collective bargaining agreement, shall be supplemented as follows: Section 14.4 ‐ Disability Retirement. 1. Non‐duty Disability Retirement. A bargaining unit member approved for a non‐duty disability retirement by the City of Battle Creek Police and Fire Pension Board shall be eligible for a disability retirement benefit calculated on the basis of 1.5% of the member's final average compensation multiplied by the number of years of worked credited service prior to the approval of the disability retirement. Upon reaching age 55, the member's disability retirement pension shall be recalculated on the basis of 3.0% of the member's final average compensation multiplied by the number of years of service credited to the member at time of his/her retirement. 2. Duty Disability Retirement. A bargaining unit member who is approved for a duty disability retirement by the City of Battle Creek Police and Fire Pension Board shall be eligible to receive a disability retirement benefit calculated upon 50% of the member's final average compensation and shall be payable until the member's attainment of age 55. Upon reaching age 55, the member shall receive a disability retirement pension computed on the basis of a 3.0%multiplier for the years of credited service worked prior to the effective date of the member's duty disability retirement as well as for the years not worked, but otherwise credited, prior to attaining age 55 from the date of separation. A member shall receive 1 % of final average compensation for years beyond 25 years up to the maximum benefit equal to 80% of final average compensation. pg. 4   This settlement was signed by Police Officers Labor Council Scott Eager and Brandin Huggett, and HR Director Michelle Hull. Question to the Board: Since Appendix B of this settlement was signed by just the Police (POLC) union and no other Police or Fire unions were involved, does the Board want to update their policy to incorporate all Police & Fire unions into this change, and update the Board’s Disability Retirement policy to include Appendix B for all Police and Fire members? Answer from the Board: Yes, the Board will update their Disability Retirement policy for all Police and Fire members. Motion Rabbitt, seconded by Wolfserberger to approve the adjusted Duty Disability retirement for Scott Marshall as put forth by the grievance settlement between the City and Mr. Marshall from 4/9/25. On a voice vote, motion carried. New Business  Update the Disability Retirement policy: o Based on the discussion above regarding Scott Marshall’s grievance settlement, the Board’s attorney (VMT Law) has update the Board’s Disability Retirement Policy to include Appendix B of the grievance settlement. o In the Disability Retirement policy, starting on page 6 in the section labeled ‘Disability Retirement Options’, bullet points 3 and 4 have been updated to reflect Appendix B of the settlement. These two bullet points now read as follows: Duty disability pension benefits are equal to 50% of Final Average Compensation calculated based on your disability retirement effective date. When you attain age 55 your benefit will be adjusted to reflect a Straight Life Pension based on your years of credited service while working plus the years of service earned while receiving duty disability pension benefits. All such years will be calculated using a 3% multiplier as addressed in your collective bargaining agreement. However, a member shall receive 1% of final average compensation for years beyond 25 years and up to the maximum benefit equal to 80% of your final average compensation. Non‐duty disability pension benefits are equal to 1.5% of your Final Average Compensation calculated based on your disability retirement effective date, multiplied by your years of credited service while working. When you attain age 55, your benefit will be adjusted to reflect a Straight Life Pension based on your years of credited service while working, times a 3% multiplier as addressed in your collective bargaining agreement. Motion Martin, seconded by Todd to approve the changes to the Disability Retirement policy based on the opinion from the Board’s attorney, VMT Law. On a voice vote, motion carried. pg. 5   CAPTRUST: Cohen provided an investment update for Quarter 1, the quarter ending 3/31/25: o At the end of Quarter 1 of 2025, U.S. Bonds were up 2.8%, U.S. Small‐Cap Stocks were down 9.5%, and U.S. Large‐Cap Stocks were down 4.3%. Compared to the end of 2024 where U.S. Bonds were up 1.3%, U.S. Small‐Cap Stocks were up 11.5%, and U.S. Large‐Cap Stocks were up 25.0%. o Keeping an eye on the tariff conversation. Not sure what the government’s end‐ goal is yet, but the situation is being monitored closely. This is seen as more of a short‐term volatility issue. The City’s P&F Pension plan is allocated based on a long‐term perspective, so not much has changed regarding the City’s P&F Pension portfolio. o As of 3/31/25, the Beginning Market Value of the Plan was $195,479,886 with an Ending Market Value of $188,271,011. o Calendar‐Year‐to‐date, the Beginning Market Value of the Plan was $191,543,766 with an Ending Market Value of $188,271,011. o For the month of March, the total portfolio was down 3.08%. o The BlackRock Mid Cap Growth Fund has seen a lot of turnover during their portfolio’s transition. This has led to a deviation in their investment strategy. Due to this deviation, CAPTRUST is recommending the P&F Plan remove BlackRock Mid Cap Growth from their portfolio and replace with MFS Mid Cap Growth. MFS Mid Cap Growth will pair well with the current Mid Cap Value Fund the Pension Plan has. Motion Martin, seconded by Wolfersberger to remove the BlackRock Mid Cap Growth Fund from the Pension Plan’s portfolio, and replace with the MFS Mid Cap Growth Fund. On a voice vote, motion carried. Public Comment – none Closed session to discuss new disability retirement application. Motion Wolfserberger, seconded by Todd to go into closed session. On a voice vote, motion carried. Tabled. The Board has tabled the disability retirement application until they receive all doctor records associated with the applicant. The Board also needs more information regarding a possible upcoming surgery for the applicant and how that will impact the timing of the doctor evaluations that are needed as part of the disability retirement application. Motion Martin, seconded by Rabbitt to exit closed session. On a voice vote, motion carried. Next regular meeting: Tuesday, May 27th at 10:00am. pg. 6 Meeting adjourned at 2:41pm Respectfully submitted, Lily Vardell, Recording Secretary __________________________________ __________________________________ Board Member signature Board Member signature pg. 7