Firefighters Pension Board

NITES FIREFIGHTERS' PENSION FUND BOARD OF TRUSTEES MEETIN6 8360 DEMPSTER NttEs, lt 50714 August 29, 2019 The meeting was called to order at 8:31 a.m. by President Byron Tull. Trustees Present: Bob Greiner, Byron Tull, Rich Teper, and Jim Grammas. Absent was Marimel Lim. Officials Present: Tom Sawyer from Sawyer Falduto Asset Management, LLC, lnvestment Advisor to the Fund; Attorney Carolyn Clifford, Ottosen Britz; Rich Scipione, Pension Clerk to the Fund; Trinette Gardner, Accountant to the Fund, Lauterbach & Amen, LLP; and Bob Rietz, Actuary to the Fund, Lauterbach & Amen, LLP. Public Comment: No public comment. Previous Minutes Approval: On a motion by Grammas, seconded by Tull, the minutes from the May f6, ZOLg meeting were approved by a unanimous voice vote. Actuarial Study Bob Rietz, actuary from Lauterbach & Amen, presented the preliminary actuarial valuation as of May 1, 2019. 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 year 2040, using the projected unit cost method. The Village of Niles pension payment will be amortized 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 5160,533 from prior year due to salary increases, demographic changes, assumption changes, funding poliry changes, asset return less than expected, and contributions greater than expected. The recommended contribution is 54,359,738 with an expected payroll of $5,691,821. Our current actuarial investment return is 7.00% versus our current return on investment at 6.4% net of administrative expenses. The actuarial value return on investment is 5.270 net of administrative expenses. The actuarial liability is 582,446,137. The actuarial value of assets was 42.10% and the market value of assets was 41.70%. The employer normal cost contribution is 51,390,361, the statutory minimum contribution is S3,493,755, and the actuary contribution recommendation is S4,369,738. 1  NII."ES FIREFIGHTERS' PENSION FUND BOARD OF TRUSTEES MEETING 8350 DEMPSTER N ."Et tt 60714 August 29, 2019 Bob Rietz instructed that we are using an outdated mortality table. He recommends that the fund use the new mortality tables in subsequent actuarial reports. The expected increase to the Village's recommended contribution will be 2%-3y". Bob reported that the Niles Firefighters' Pension Fund GASB 67/68 Report is not yet available and will be forwarded as soon as it is completed. Lauterbach and Amen, LLC Report Trinette Gardner from Latuerbach & Amen presented the July 31, 2018 Monthly Financial Report. At the end of July 31, 2019, the net position held in trust for pension benefits w as 535,076,777.7 6. The Fund paid checks numbered 30233-30247 (Harris account) and 50039 (Schwab account) from May 1, 2018 through July 31, 2018, for a total of s179,069.61. A motion was made by Tull, seconded by Grammas, to approve the financial report as presented. Upon a call of the roll: AYES: Greiner, Tull, Teper, and Grammas NAYS: None ABSENT: Lim Motion carried- A motion was made by Tull, seconded by Grammaq to approve the financial report including bills and disbursements as presented. Upon a callofthe roll: AYES: Greiner, Tull, Teper, and Grammas NAYS: None ABSENT: Lim Motion carried. The lllinois Department of lnsurance Annual Statement is in draft format, awaiting the Village of Niles audit completion. Lauterbach & Amen is scheduled to file the Annual Statement by the October 31 deadline. The affidavits of eligibility are ongoing and still waiting for four people to submit the affidavits. The Village of Niles audit is ongoing and on track to be completed in October. 2  NITES FIREFIGHTERg PENSION FUND BOARD OF TRUSTEES MEETING 8360 DEMPSTER l{rtEt rt 60714 August 29, 2019 lnvestment Advisor's Report: Tom Sawyer from Sawyer Falduto presented the Fund's June 30, 2019 "Second Quarterly lnvestment Report." The 2019 second quarterly ending market value was 534,028,943, with an investment return of S3,901,179 year to date. The total account return for the second quarter was 3.21% versus the benchmark of 3.63%. The equity rate of return for the second quarter was 3.39% versus the blended benchmark ol 3.97%. The fixed income rate of return was 2.83% versus the benchmark of 2.99%. The cash equivalent return was 0.43% versus the three-month Treasury Bill of 0.64%. Our current portfolio allocation as of June 30, 2019: Equities at 62.8Yo, Fixed lncome at 37.170, and Cash Equivalent at 0.1%. Tom Sawyer is asking for flexibility in the fixed income fund portfolio allocation. The current investment policy includes a target percentage for the individual fixed income classes. The proposed policy would remove the target and use an allocation range in each of the fixed income asset class. A motion was made byTull, seconded by Grammas, to approve the updated lnvestment policy. AYES: Greiner, Tull, Teper, and Grammas NAYS: None ABSENT: Lim A motion was made by Tull, seconded by Grammas, to accept the Quarterly lnvestment Performance Report, June 30, 2019, as presented. Upon a call of the roll: AYES: Greiner, Tull, Teper, and Grammas NAYS: None ABSENT: Lim Motion carried. Old Business: we have one disabled member who was sent to a physician for his annual IME: Steve Zook. We received the completed report earlier thls month. Steve zook continues to be disabled. 3  NITES FIREFIGHTERS PENSION FUND BOARD OF TRUSTEES MEETING 8350 DEMPSTER Ntl"ES, tt 60714 August 29, 2019 Fire Apparatus Engineer Greg Schmidt applied for regular retirement on May 1, 2019. He had thirty years and one month of creditable service with a total salary of 5110,959.12. His monthly pension is 56,935.57. Lauterbach & Amen prepared the benefit calculation which was reviewed by the Board. On a motion by Tull, seconded by Grammas, to approve Greg Schmidt's regular retirement pension with a monthly pension of SO935.57. AYES: Greiner, Tull, Grammas, and Teper NAYS: None ABSENT: Lim Motion carried. Louis Panagopoulos has a completed a request for combined creditable service with the Hanover Park Firefighters' Pension Fund. The request is for 5 years, 6 montht and 29 days purchased from the Hanover Park Firefighters' Pension Fund. Louis is in the Tier 2 Pension Fund and will be paying an additional 1% in pension contributions. On a motion by Tull, seconded by Grammas, to approve Louis Panagopoulos combined creditable service request of five years, six months, and twenty-nine days. AYES: Greiner, Tull, Grammas, and Teper NAYS: None ABSENT: Lim Motion carried. Carolyn is asking for clarification on Tier 2 combined creditable service. This issue is ongoing and Carolyn will keep us updated on future legislation. Trinette has submitted our pensione/s data to the death audit service with nothing found at this time. She will keep us updated if there are any changes. Byron is asking for a meeting with the Niles Finance Committee to discuss a change In the investment rate of return in the actuarial valuation. The Mayor of Niles wants to meet with the Board members regarding what the Village of Niles is doing to fund the pension fund. Byron wants to continue pursuing a change of the rate of return to 6.75%. Carolyn will contact the Village and the Police Pension Fund members regarding a joint meeting on this issue. 4  NILES FIREFIGHTERS, PENSION FUND BOARD OF TRUSTEES MEETING 8350 DEMPSTER N|LES, tL 50714 August 29, 2019 New Business: Carolyn presented and an update to the Niles Fire Pension rules and regulations- She asks that all trustees review the material. The Board will be expected to vote on the approval of these changes at the next board meeting. Carolyn has started the disability process for Brian Collins. we sent the authorization for medical records and are preparing for choosing physicians for the independent medical exam. Carolyn is workinB on the appropriate subpoenas Training: Carolyn distributed training material for the Board to review. Training article included "Pension Pointers, Eight Questions" and "Ottosen Britz Pension Practice Quarterly lnsights for Pension Trustees." The Board designates two hour of training for the material and actuarial review. Next Meeting: The next meeting is scheduled for October 31, 2019 at 8:30 a.m. The meeting was adjourned at 10:30 a.m. on a motion by Tull, seconded by Grammal and approved upon a unanimous voice vote. Respectf ully submitted, Bob Greiner, Secretary Minutes approved by the Board of Trustees at its meeting on octobet 37,2019. Minutes prepored by Rich Scipione, Pension Clerk to the Fund 5