Police & Fire Retirement System

CITY OF MADISON HEIGHTS POLICE & FIRE RETIREMENT SYSTEM SPECIAL SCHEDULED TRUSTEE MEETING May 12, 2023 The special meeting of the City of Madison Heights Policemen & Firemen Retirement System Board of Trustees was held on Friday, May 12, 2023, at 8:40 a.m. at 31313 Brush Street, Madison Heights, Michigan. Present: Chairperson, Jeff Geralds Board Members: Kevin Barrett, Eric Bissinger, Linda Kunath Others Present: Retirement System Attorney Thomas Michaud Morgan Stanley\Graystone investment advisors Brian Brice Gary Strongarone Excused: Board Member: Anthony Roberts 46-23 Excuse Trustee Anthony Roberts Motion by Trustee Barrett and supported by Trustee Bissinger to excuse Trustee Anthony Roberts from the regular meeting of May 12, 2023. Yeas: Barrett, Bissinger, Geralds, Kunath Nays: None Absent: Roberts Motion Carried. 47-23 Approval of Minutes of the Special Meeting of April 13, 2023 Motion by Trustee Barrett and supported by Trustee Bissinger to approve minutes of the special meeting of April 13, 2023. Yeas: Barrett, Bissinger, Geralds, Kunath Nays: None Absent: Roberts Motion Carried. 48-23 Approval of Minutes of the Regular Meeting of April 18, 2023 Motion by Trustee Bissinger and supported by Trustee Barrett to approve minutes of the regular meeting of April 18, 2023. Yeas: Barrett, Bissinger, Geralds, Kunath Nays: None Absent: Roberts Motion Carried. Meeting Open to the Public No items were discussed. 1 05/12/2023 49-23 Morgan Stanley\Graystone Consulting Investment Report Morgan Stanley Brian Brice discussed the Plan’s asset allocation, percentage of portfolio and differences to policy target. The bear market rally that began in mid-October 2022 continued with the S&P 500 as of 3/31/23 up 7% year-to-date. The Federal Funds rate was 5% at the end of March, as concerns about financial stability emanating from the regional bank turmoil and SVB failure mute Federal Reserve aggressiveness. Morgan Stanley forecast one or two rate cuts by end of December. The forecast for 10-year Treasury yields over the next 12 months is 3.15-3.25%. Morgan Stanley advice is to overweight cash and ultra-short fixed income, collecting positive real yields with an eye toward patience regarding the start of a new bull market. Hedge fund investment with Brevin Howard is being reviewed by Tom Michaud. The policy targets 3%, about $1.3 million, to invest in hedge funds. Quarter to date returns were 4.34%, meeting policy benchmark, last 3 years up 10.56%, under benchmark of 11.21%, and last 5 years up 5.56%, under bench mark of 5.94%. The total assets as of May 4, 2023 were $43,704,359 and were $43,049,097 at March 31, 2023. Motion by Trustee Bissinger and supported by Trustee Barrett to receive and file the investment report. Yeas: Barrett, Bissinger, Geralds, Kunath Nays: None Absent: Roberts Motion Carried. 50-23 Graystone Consulting Asset Allocation Study Motion by Trustee Bissinger and supported by Trustee Barrett to receive and file the Graystone Consulting Asset Allocation Study, dated May 8, 2023. Yeas: Barrett, Bissinger, Geralds, Kunath Nays: None Absent: Roberts Motion Carried. 51-23 Discuss RFI – Actuarial Consulting Services The Board discussed the RFI – actuary consultant services proposals that were received and interviews that occurred on April 13, 2023, and vendor references. Motion by Trustee Bissinger and supported by Trustee Barrett to direct City Administration to pursue an agreement with Gabriel, Roeder, Smith & Company subject to review with the Pension Attorney. Yeas: Barrett, Bissinger, Geralds, Kunath Nays: None Absent: Roberts Motion Carried. New Business. A legislative update was provided by Tom Michaud about the Protecting MI Pension grant program. The State of Michigan released application information for eligible municipalities, under 60% funded, to reference, which is based on financial data as of December 31, 2021. At that time the Police and Fire Retirement System was 56.1% funded . The City timely applied for this grant, which Linda Kunath noted the grant will potentially provide $3.6 million to the System. 2 05/12/2023 52 -23 Adjournment Motion by Trustee Barrett and supported by Trustee Bissinger to adjourn the meeting. Yeas: Barrett, Bissinger, Geralds, Kunath Nays: None Absent: Roberts Motion Carried. Meeting was adjourned at 9:59 a.m. Respectfully submitted, Linda A. Kunath, Secretary 3 05/12/2023