Retiree Health Care Investment

Minutes Retiree Health Care Investment Meeting August 8, 2025, 9:30 a.m. City Hall, Room 122 203 S. Troy Street Royal Oak, Michigan 48067 Present: Lee Collick – Chairperson Zachary Meckl – Vice Chairperson Amanda Herzog - Trustee Joseph Gacioch – City Manager Kymberly Coy – Finance Director Lisa Genord – Financial Analyst / Pension Technician Rebecca Chase – Senior Accountant Tom Michaud – VanOverbeke, Michaud, & Timmony, P.C. Brian Green – Mariner Institutional Absent: Monica Hunt - Trustee _____________________________________________________________________ 1. Call to Order The meeting was called to order at 10:30 am. 2. Public Comment None 3. Approval of Agenda Moved by: Lee Collick Seconded by: Zachary Meckl Motion Adopted 4. Approval of Minutes Moved by: Lee Collick Seconded by: Zachary Meckl Motion Adopted 5. Investments 1 Investment performance review presented by Brian Green of Mariner Institutional Market value/allocation of assets as of June 30, 2025, is $169,849,591 3-month performance – total portfolio underperformed the benchmark: 5.32% vs. 6.44% index. Fiscal year-to-date performance – total portfolio underperformed the benchmark: 10.61% vs. 10.91% index. Year-to date performance – total portfolio outperformed the benchmark: 5.74% vs. 5.47% index. 1-year performance – total portfolio underperformed the benchmark: 10.61% vs. 10.91% index. 3-year performance – total portfolio underperformed the benchmark: 10.77% vs. 10.86% index. 5-year performance – total portfolio outperformed the benchmark: 10.13% vs. 9.59% index. Inception – total portfolio underperformed the benchmark: 7.65% vs. 7.85% index. Brian reiterated that the city’s decision to bond in 2017 to fund the retiree health care trust liability and has been a positive financial contribution to the city. Brian reported that back in February 2025 and from a policy standpoint, 10% was removed from the city’s equity allocation and put it into fixed income. Brian stated that because the health care trust portfolio is 137% funded, this reallocation was an effort to protect the overfunded status. Brian reported that for the fiscal year to date, the portfolio yield 10.61%, which well exceeded the IRR of 7.25%. Brian also report that all of the market dominance from a U.S equity standpoint is driven by Artificial Intelligence (AI) companies, such as NVIDIA, Meta, Alphabet, Apple, Google, Microsoft. Brian stated that he will likely be bringing forth recommendation in the 4th quarter to build out a little more from a private fixed income standpoint. Brian stated that the board made an initial commitment to Monroe Capital in 2024, with 60% of that capital being put to work, with a 10% yield on a quarterly basis. Investment Policy Statement (IPS) – annual update Brian stated that this topic was included as part of an annual review process and that the IPS was last revised in February 2025. Brian stated that he does not have any recommended changes to the IPS at this time. Moved by: Lee Collick Seconded by: Zachary Meckl Approve the Investment Policy Statement (IPS) as presented Motion Adopted Moved by: Lee Collick Seconded by: Zachary Meckl Receive and file all investment reports. 2  Motion Adopted 6. Legal Tom Michaud, retiree health care investment board attorney, stated that per PA 202 of 2017, a peer actuarial audit is required of all health care funds and by early next year, the board will need to discuss which of two options to select: #1 – Change the actuary, or, #2 – retain a different actuary to review the current actuary. Tom stated that the State of Michigan Treasury department has advised that each local community has the discretion to determine to what extent and depth the actuarial audit can be conducted. Tom stated that now that the state has better defined the rules on this topic, his office expects to receive more clarity in the next several months as to what other health care systems are electing to do, so Tom would like this topic to remain on the retiree health care agendas moving forward to facilitate further discussion. 7. Other Lee Collick advised Brian Green of Mariner Institutional that Kymberly Coy, Finance Director, will provide Brian with an additional request for more information relative to the annual consultant review - fee proposal discussion. Moved by: Lee Collick Seconded by: Zachary Meckl Renew the retiree health care trust fiduciary liability insurance policy for 7/30/2025 - 7/30/2026. Motion Adopted 8. Adjournment Lee Collick advised that there will be a Special Retirement Board Meeting on Friday, September 5, 2025 at 9 am, located in conference room #122 at the City Hall Building at 203 S. Troy Street, to discuss the Annual Advisor Consultant Review – Fee Proposal agenda topic. The meeting was adjourned at 10:43 am. Moved by: Lee Collick Seconded by: Zachary Meckl Motion Adopted 3