Retirement Board

***Amended*** CITY OF MIDDLETOWN MINUTES OF THE RETIREMENT BOARD Monday, May 18, 2020 at 9:00 am via WebEx The Regular Meeting of the Retirement Board of the City of Middletown was held via WebEx Board Members Present: Steve Gomes, Carl Erlacher, John Milardo, Sandy Pasculano, Vinnie Loffredo, Linda Salafia Board Members Absent: Mayor Florsheim, Joe Serra City Employees/Public/Others Present: Diana Doyle. Gerry Goldberg (GYL), Michael Lepore (GYL)  Meeting Called to Order at approximately 9:00 am  No Public Comments on the Agenda  Approval of Minutes – no motions to approve or reject o February 18, 2020 Regular Meeting o March 13, 2020 Emergency Meeting  GYL Review o The Pension Fund value at the end of the 1st quarter was $395,488,765 o Michael reviewed the performance of the Plan; noted that SLC/Fixed Income was the bright spot of the portfolio performing ahead of benchmark o Stated that conservative bent of active strategy provided downside mitigation (during Covid-19 economic crisis); and, Plan held up well versus absolute basis to peers and versus relative basis to benchmark o The OPEB Trust value at the end of the 1st quarter was $14,654,784 o Michael advised Board that GYL removed Transamerica from watch list o Discussion of Risk Assessment Questionnaire with Board; Board will send RAQ to members that have not responded  o GYL recommended a tactical shift in the current asset allocation, maintaining the current ratio of 60/40; proposed an increase to Large Cap and Emerging Equity exposure with a reduction to Small Cap exposure o Proposed moving away from current passive strategy of Large Cap investment, eliminating the S&P 500; recommended including Active strategy (for value) with Index (for growth); strategy geared towards Core with Value tilt and disciplined dividend strategy o Recommended Fidelity Large Growth, using Russell 1000 Index; less expensive (lower fees) with greater selection than S&P 500 o Recommended Conning High Dividend Equity (Hartford based); offers conservative, income focused valuation, with heavy emphasis on quality names with sustainable dividend income streams; GYL negotiated preferential pricing for Plan  Discussion of duration of Conning fees; GYL will obtain written commitment of discounted fee schedule; Vinnie requested the inclusion of the fees on record o $102mm proposed to be invested in Large Cap; 50/50 split between Fidelity and Conning; investment includes second phase of $23mm Fixed Income liquidation (approved at March 13, 2020 Emergency Meeting)  Vinnie motioned to approve recommended Tactical Allocation (remaining at 60/40), as represented in GYL presentation, and was seconded by John  All in favor  John motioned to approve engagement of Conning into Large Cap Value/Core with combined utilization of Fidelity Index for Large Growth exposure, and was seconded by Linda  All in favor o Michael advised Board that the recommended Allocation is within bounds of current Investment Policy Statement  Reports: (informational) o Treasurer’s Report o Pension Management Fee Report   Applications for Membership Start Date Department/Union No applications for membership  Requests to Retire/Collect/Vest Yrs of Svc Department/Union Tina Loomis 30 yrs BOE/466 Henry Nunes 23 yrs Public Works/466 Charles Vannoy 21 yrs Central Comm/466  Deceased Pensioners Sebastian LaRosa Helene Raymond  Adjournment of Meeting  Vinnie motioned to adjourn and was seconded by John  All in favor Respectfully submitted: Carl Erlacher