Retiree Health Care Investment Board

CITY OF ROYAL OAK RETIREE HEALTH CARE INVESTMENT BOARD MINUTES OF THE REGULAR MEETING OF THE BOARD OF TRUSTEES A meeting of the Retiree Health Care Investment Board of Trustees was conducted at the City Hall building in conference room # 122 on Friday September 24, 2021, at 8:00 a.m. The meeting was called to order at 8:01 a.m. Attendance / Roll Call: PRESENT: Lee Collick - Chairperson Bret Nelson - Vice Chairperson Kyle DuBuc - Trustee Monica Hunt - Trustee ALSO PRESENT: Julie Rudd - Bd Chief Administrative Officer/ Bd Secretary/Bd Treasurer – via phone Lisa Genord - Financial Analyst / Pension Technician Tom Michaud – Bd attorney with VanOverbeke Michaud and Timmony Brian Green – AndCo Investment Advisor Sally Corbin – Union Services Agency (USA) ABSENT: Paul Brake - Trustee Public Comment There were no public attendees / comments. Board approval of the agenda for the September 24, 2021, meeting Moved by Lee Collick to approve the agenda for the September 24, 2021 meeting Supported by Bret Nelson MOTION ADOPTED UNANIMOUSLY 4/0 Board approval of the draft minutes for the August 27, 2021 meeting Moved by Lee Collick to approve the draft minutes for the August 27, 2021 meeting Supported by Bret Nelson MOTION ADOPTED UNANIMOUSLY 4/0 INVESTMENTS Investment performance review presented by Brian Green of AndCo. Market value/allocation of assets as of August 31, 2021, is $159,382,851. Current month – total portfolio outperformed the benchmark: 1.76% vs. 1.75% index. 3-month performance – total portfolio underperformed the benchmark: 3.35% vs. 3.93% index. Year-to date performance – total portfolio outperformed the benchmark: 12.76% vs. 11.60% index. 1-year performance – total portfolio outperformed the benchmark: 23.43% vs. 20.56% index. 3-year performance – total portfolio underperformed the benchmark: 11.34% vs. 11.90% index. Inception – total portfolio underperformed the benchmark: 9.68% vs. 10.79% index. Brian reported that there was a little pull-back in the market in September which levelled out performance overall. Brian also reported that investors are intently watching the FED with regards to if / when they will increase interest rates. 1 The complete AndCo Investment Performance Review report dated August 31, 2021 is on file in Finance office. Moved by Lee Collick to receive and file. Supported by Bret Nelson MOTION ADOPTED UNANIMOUSLY 4/0 PGIM Real Estate Quarterly Insights 3Q21 – United States (enclosed) Moved by Lee Collick to receive and file. Supported by Bret Nelson MOTION ADOPTED UNANIMOUSLY 4/0 LEGAL None OTHER 2021 Renewal of Fiduciary Liability Insurance coverage dated July 30, 2021. Sally Corbin from Union Services Agency (USA) provided copies of both the retirement system and retiree healthcare investment trust fiduciary liability insurance policies which are effective from 7/30/2021 – 7/30/2022. Sally stated that the COVID-19 pandemic has been a disrupter in the fiduciary insurance space, leading to a shift in premiums and retentions. Sally stated that the city’s premium on both policies did increase which was tied to asset increases with the underwriters, and she also stated that a (new) $25,000 deductible had been added to each policy. Sally reported that the purpose of fiduciary insurance is to protect the board trustees in situations where there could be a non-indemnifiable claim. Tom Michaud, board attorney, stated that adding a $25,000 deductible to each policy is a significant change and asked if USA had shopped the policy to the Chubb Insurance Company. Tom also asked about what other options may exist for non-deductible plans and / or other carriers, and also asked if there would be any efficiencies or cost-savings created by combining both the retirement board and retiree health care investment policies into one policy. Sally stated that she would research Tom’s questions and provide Julie Rudd with feedback. Kyle Dubuc asked Tom what the exposure is to the individual retirement board trustees. Tom stated that if they retirement system is sued, then the litigation would be brought against both the retirement plan as well as the individual trustees and stated that the fiduciary coverage insurance policies are very specific to pension plans and trustees. Monica Hunt asked if $1 million dollars per policy is enough coverage for the plans and trustees. Sally stated that Union Services Agency (USA) is consistently working with other carriers / underwriters across the country to ensure that the $1 million dollar limit on the city’s policies is comparable to other plans similar in size, and that she will alert the city if our policy limits should be increased. Sally also spoke briefly about trends in cyber liability insurance and offered literature on a stand-alone policy on a cyber liability insurance. Julie Rudd stated that the city does have cyber liability coverage through our general liability policy with the Michigan Municipal Risk Management Authority (MMRMA). NEXT MEETING AND ADJOURNMENT Next regular meeting is scheduled immediately following the retirement system board meeting at approximately 8:30 a.m. on Friday, October 15, 2021 at the City Hall Building at 203 South Troy Street, in the 1st floor conference room # 122. Moved by Lee Collick to adjourn the meeting (8:18 a.m.) and confirm the next meeting for October 15, 2021, immediately following retirement system board meeting at approximately 8:30 a.m. Supported by Bret Nelson MOTION ADOPTED UNANIMOUSLY 4/0 2