Firefighters Pension Board

Niles Firefithters' Pension Fund Board of Trustees Meeting 8360 Dempster l{iles, lt 60714 October 30, 2018 The meeting was called to order at 8:32 a.m. by President Byron Tull. Trustees Present: Byron Tull, Bob Greiner, Marimel Lim, and Jim Grammas. Absent was Trustee John Zeman. Officials Present: Tom Sawyer and John Falduto from Sawyer Falduto Asset Management, LLq lnvestment Advisor to the Fund; Attorney Carolyn Clifford, Ottosen Britz; and Trinette Gardner, Michelle Hawkins, and Actuary Bob Rietz, Lauterbach & Amen, LLP Public Comment: No public comment. Approval of Minutes: On a motion by Tull, seconded by Grammat the minutes from the August 22,2018 quarterly meeting were approved by a unanimous voice vote. Byron reviewed the closed meeting minutes as required semi-annually. The minutes reviewed were: November 30, 2002 February 4, 2009 December 15, 2004 September 28, 2009 February 9, 2005 October 15, 2009 February 25, 2005 February 8, 2010 April 11, 2006 April 7, 2010 December7,2006 September 7, 2010 January 8, 2008 August 26, 2015 On a motion by Tull, seconded by Greiner, to keep the listed meeting minutes closed for another six months: AYES: Greiner, Tull, Lim, and Grammas NAYS: None ABSENT: Zeman Motion carried. 1  Niles firefighters' Pension Fund Board of Trustees Meeting 8360 Dempster Niles, lL 60714 October 30, 2018 Financial and Treasuret/s Report: Trinette Gardner from Lauterbach and Amen reviewed the Statement of Net Position as of September 30, 2018. The total assets as of September 30, 2018 were 533,061,188.03 and total liabilities of 54,598.00. The net position held in trust for pension benefits is 533,056,490.03. Trinette presented the monthly financial statements. The Fund paid checks numbered 30190-30199, record from August 1, 2018 through September 27, 2018, for a total of 595,257.05. A motion was made by Tull, seconded by Grammas, to approve the financial report including payment of the bills and disbursements as presented. Upon a call of the roll: AYES: Greiner, Tull, Grammas, and Lim NAYS: None ABSENT: Zeman Motion carried. The lllinois Department of lnsurance Annual Statement is due tomorrow. Laurie Nannini filed a request for an extension because the Villa8e audit has not been completed. Lauterbach and Amen will proceed with filing the DOI Annual Statement without the Village audit. Once audit is received the DOI Annual Statement will be amended if necessary. A motion was made by Tull, seconded by Grammat to approve the Department of lnsurance Annual Statement as presented. Upon a callofthe roll: AYES: Greiner, Tull, Lim, and Grammas NAYS: None ABSENT: Zeman Motion carried. Bob Rietz presented the final copy of the actuarial valuation. The draft actuarial results that were presented at the last pension meetin8 have been finalized. Changes were made to reflect the 7% discounted rate that was determined by the Village's Finance Committee, which is a reduction from the 7.25% previously used in the valuations. The Board's ori8inal request was to lower the assumption to 6.5% to align with the lllinois Department of lnsurance's investment return assumption. The actuarial cost method will continue to be entry age normal. The current method for funding will be 100% funded by the year 2037, as opposed to the lllinois statutory minimum contribution of 90% by the yeat Z0!,O, using the projected unit cost method. The Village of Niles pension payment will be amortized 2  Niles Firefighters' Pension Fund Board of Trustees Meeting 8350 Dempster Niles, lt 60714 october 30, 2018 using level percent funding instead of level dollar cost averaging as in the past with a five-year smoothed market value The recommended contribution has increased 5410,179 from prior year due to salary increases, demographic changes, assumption changes, funding policy changes, asset return less than expected, and contributions greater than expected. Our current actuarial investment return is 7.0O% versus our current return on investment at 6.9% net of administrative expenses. The actuarial value return on investment is 4.7% net of administrative expenses. The actuarial liability is 580,337,520. The actuarial value of assets was 40.94% and the market value of assets was 40.12%. The employer normal cost contribution is 5620,249, the statutory minimum contribution is S3,405,958, and the actuary contribution recommendation is 54,209,205. Carolyn noted that this new contribution payment of 54,209,205 is higher than the current annual benefit payments of 54,070,538. On a motion by Tull, seconded by Greiner, to accept the May 1, 2017 through April 30, 2018 actuarial report with the revised rate of return of 7tyo, as determined by the Village of Niles Finance Committee, prepared by Lauterbach and Amen. Upon a callof the roll: AYES: Greiner, Tull, Lim, and Grammas NAYS: None ABSENT: zeman Motion carried. lnvestment Advisot's Report: Tom Sawyer from Sawyer Falduto presented the Fund's September 30, 2018 "Quarterly lnvestment Report." The 2018 third quarterly ending market value was 533,039,139, with an investment retu m ot 5782,222. The total account return for the third quarter was 2.41% versus the benchmark of 3.I7%. The equity rate of return for the third quarter was 4.35% versus the blended benchmark ol 6.25Yo. The fixed income rate of return was {.09% versus the benchmark of -0.57%. Our current portfolio allocation as of September 30, 2018: Equities at 62.0%, Fixed lncome at 37.9%, and cash Equivalent at 0.1%. There are no pending changes to the lnvestment Policy and/or Asset Allocation Parameters. This item will be included on the Agenda in the future. 3  Niles Firefighters' Pension Fund Board of Trustees Meeting 8350 Dempster Niles, lL 60714 october 30, 2018 On a motion by Tull, seconded by Grammas, to accept the lnvestment Report endinB September 30, 2018. Upon a call of the roll: AYES: Greiner, Tull, Lim, and Grammas NAYS: None ABSENT: Zeman Motion carried. Old Business: Byron reviewed the status of annual affidavits of eligibility. All affidavits of eligibility have been received by Lauterbach and Amen and were given to the Fund. There was no further review of the negative press regarding Niles Pension Funds. New Business: Carolyn Clifford from Ottosen Britz presented the 2019 tax levy recommendation letter that will be sent to the Village. The Board requests the Village of Niles lew the recommended actuarial amount of 54,592,893, reflecting a 6.5% investment rate of return assumption. On a motion by Tull, seconded by Greiner, to approve the Tax Levy Request from the Niles Firefighters' Pension Fund for 2018 of 54,592,893 and send the letter to the Village of Niles. Upon a call of the roll: AYES: Greiner, Tull, Lim, and Grammas NAYS: None ABSENT: Zeman Motion carried. Steve presented the Municipal Compliance Report for the fiscal year ended April 30, 2018. lt was noted that the recommended and statutory minimum municipal contributions in the report will reflect the actuarial valuation results using the Village's preferred 7% investment return assumption, even though the Board will be making its contribution request based on the lower investment return assumption of 6.5%. On a motion by Tull, seconded by Grammas, to approve and adopt the Municipal compliance Report. Upon a call of the roll: AYES: Greiner, Tull, Lim, and Grammas 4  Niles Firefighte rC Pension Fund Eoard of Trustees Meeting 8360 Dempster Niles, lt 60714 october :n, 2018 NAYS: None ABSENT: Zeman Motion carried. Training: carolyn distributed and reviewed training material for the Board. Training included an article from Ottosen Britz Pension Client Alert for Pension Trustees (October 2018) on Pension Trustee Training and an article from the lllinois Association of Fire Protection District's Fire Call Pension Pointers on Applying Fiduciary Principles to Setting lnvestment Return Assumptions. The Board has designated one hour of traininB for this meeting. CIosed Meeting: There was no closed session. Schedule 2019 Meetings: The Board reviewed the proposed 2019 schedule: February 27, May 16, August 29, and October 31 at 8:30 a.m. at Niles Fire Department Station 2. On a motion by Tull, seconded by Greiner, to approve the 2019 regular meeting schedule, the motion was approved by a unanimous voice vote. The meeting was adjourned at 10:12 a.m. on a motion by Greiner, seconded by Tull, and approved upon a unanimous vote voice. Respectfully submitted, Bob Greiner, Secretary Minutes approved by the Board of Trustees at its meeting on February 21, 2019. Minutes prepared by Rich Scipione, Pension Clerk to the Fund 5