General Employees Retirement Board

OFFICIAL MINUTES OF REGULAR MEETING OF THE STERLING HEIGHTS GENERAL EMPLOYEE’S RETIREMENT SYSTEM Thursday, April 19, 2012 ___________________________________________________________________ Location: Room #201 40555 Utica Road, Sterling Heights, MI 48313 (586) 446-2331 Acting Chairperson Baker called the meeting to order at 1:32 p.m. BOARD MEMBERS PRESENT: Richard Weiler, Chairperson Brian Baker, Secretary Jennifer Varney, Treasurer Paul Henig, Trustee Todd Marsh, Trustee BOARD MEMBERS ABSENT: None. ALSO PRESENT: Walt Hessell, Pension Administrator; Thomas Michaud, Legal Counsel, VanOverbeke, Michaud & Timmony, P.C. APPROVAL OF AGENDA: Motion by Henig, supported by Marsh, to approve the agenda as amended for the addition of the money manager fees under 1 E. 1 and custodian bank services under 1 E. 4. Ayes: All. Motion carried unanimously. APPROVAL OF MINUTES: Motion by Baker, supported by Marsh, to approve the minutes of the regular meeting held March 15, 2012 and the closed meeting of March 15, 2012 (confidential). Ayes: All. Motion carried unanimously. COMMUNICATION FROM CITIZENS: None REPORT FROM LEGAL COUNSEL: Michaud informed the Board that the DMB-43 Records Retention and Disposal Schedule was officially approved by the State of Michigan. A copy of the acceptance was provided for the files. Michaud also commented on issues as they appeared on the agenda. CONSENT AGENDA: Motion by Baker, supported by Henig, to receive and file consent items I A through I D-9 and approve invoices under I E. 1, 2, 3 and 4. Ayes: All. Motion carried unanimously. I. RECEIVE AND FILE: A. Benefit register listing for April 1, 2012 from Comerica Bank showing 307 active retirees with a payout for March 2012 of $674,595.34 and a year-to-date payout of $2,827,909.99. B. Cash and Asset Statements as of March 31, 2012 from Comerica Bank and Merrill Lynch showing a total market value of $109,718,434.99 comprised as follows: Desired Actual Bank/Money Market Value Allocation Percentage Manager 0% 0.08% Comerica Bank $ 94,565.04 16% 14.93% PIMCO 16,375,974.80 16% 15.00% McDonnell 16,462,832.85 15% 13.37% Earnest Partners 14,676,652.73 8% 8.26% M. D. Sass 9,062,166.44 8% 8.35% MFS 9,159,147.45 5.33% 6.13% Victory 6,721,669.60 5.33% 6.36% Winslow 6,974,028.71 5.33% 6.19% Janus Capital 6,793,290.45 8.5% 8.56% Thornburg 9,392,609.17 8.5% 8.54% Allianz - NFJ 9,365,140.09 Cohen & Steers – 4% 4.23% 4,640,357.66 REIT C. Securities Lending Income Summary showing $933.62 collected fiscal year-to-date as compared to $1,557.36 last fiscal year-to-date. D. Correspondence 1. Portfolio Monitoring Report – Class Action Claims – Quarter ended September 30, 2011. 2. Class Action Settlements Report - Claims Due April and May 2012. 3. Q4 2011 Comprehensive AIM Report in CD-ROM format. 4. Letter and email correspondence with Merrill Lynch dated March 19, 2012 regarding the transfer of funds for the payment of benefits. 5. Email correspondence to City Manager dated March 26, 2012 regarding Prudential Financial, Inc. – Securties Litigation (confidential) 6. Wire transfer notification dated March 26, 2012 confirming the transfer of funds for the payment of benefits. 7. Notice of Pendency of Class Action – Wachovia Equity Securities Litigation dated January 27, 2012. 8. “Employee Benefit News” magazines dated March and April 1, 2012. 9. “Pension & Investments” magazines dated March 19 & April 2, 2012. E. Approve Invoices for Payment 1. Payable from System Assets for the quarterly service period ending June 30, 2012 through Merrill Lynch Consults Quarterly management fees from Janus in the amount of $12,667.62; from Earnest Partners in the amount of $27,367.92; from PIMCO in the amount of $18,291.68; from MFS in the amount of $17,079.29; from Thornburg in the amount of $16,508.00; from Victory in the amount of $12,096.18; from Winslow in the amount of $12,562.33 and from NFJ in the amount of $17,590.10. 2. Payable from System Assets for the quarterly service period ending March 31, 2012 Quarterly management fees from MD Sass in the amount of $11,328.58 and McDonnell Investment in the amount of $8,161.82. 3. Payable from System Assets for the period ending February 29, 2012 UMA initial fee for Thornburg – retro invoice correcting initial billing in the amount of $3,234.78. 4. Payable from City Assets for the quarterly service period ending March 31, 2012 Three custodian bank service invoices from Comerica Bank totaling $4,207.09. REGULAR AGENDA: II. OLD BUSINESS: A. Retirement Information for John Roy, Plant Operator Mechanic, Department of Public Works Motion by Marsh, supported by Henig, to approve the service retirement of John Roy, Plant Operator Mechanic, Department of Public Works, effective March 24, 2012 with service credit of 27 years and the monthly pension amount of $3,343.85 under option A 100% with annuity withdrawal, based upon a monthly final average compensation of $6,341.86. Ayes: All. Motion carried unanimously. B. Retirement Information for James Buhlinger, Public Works Manager, Department of Public Works Motion by Baker, supported by Henig, to approve the service retirement of James Buhlinger, Public Works Manager, Department of Public Works, effective March 17, 2012 with service credit of 24 years, one month and the monthly pension amount of $5,658.55, under option A 100% without annuity withdrawal based upon a monthly final average compensation of $11,336.86. Ayes: All. Motion carried unanimously. C. Retirement Information for Donald Mende, City Development Director / City Planner Motion by Baker, supported by Marsh, to approve the service retirement of Donald Mende, City Development Director / City Planner, effective March 16, 2012 with service credit of 30 years and the monthly pension amount of $7,967.47 under option A 100% pop-up without annuity withdrawal based on a monthly final average compensation of $13,011.56. Ayes: All. Motion carried unanimously. D. Retirement Information for Jan Mueller, Recreation Supervisor, Parks and Recreation Motion by Henig, supported by Marsh, to approve the service retirement of Jan Mueller, Recreation Supervisor, effective March 16, 2012 with service credit of 22 years, eight months and the monthly pension amount of $3,201.69 under option C 10 year without annuity withdrawal based on monthly final average compensation of $6,211.79. Ayes: All. Motion carried unanimously. III. NEW BUSINESS: A. Application for Service Retirement for Edward Piet, Librarian, City Library Motion by Baker, supported by Henig, to receive and file the application for service retirement for Edward Piet, Librarian, City Library Ayes: All. Motion carried unanimously. B. Application for Service Retirement for Karen Majewski, Management Assistant, Office of City Management Motion by Henig, support by Marsh, to receive and file the application for service retirement for Karen Majewski, Management Assistant, Office of City Management. Ayes: All. Motion carried unanimously. C. Application for Service Retirement for Dawn Peterson, Appraiser III, Office of Assessing Motion by Baker, supported by Marsh, to receive and file the application for service retirement for Dawn Peterson, Appraiser III, Office of Assessing Ayes: All. Motion carried unanimously. D. Application for Service Retirement for Walter Fox III, Equipment Operator A, Department of Public Works Motion by Henig, supported by Marsh, to receive and file the application for service retirement for Walter Fox III, Equipment Operator A, Department of Public Works. Ayes: All. Motion carried unanimously. E. Application for Service Retirement for Linda Pierce, Assistant FOIA Coordinator, Police Department Motion by Marsh, supported by Henig, to receive and file the application for service retirement for Linda Pierce, Assistant FOIA Coordinator, Police Department. Ayes: All. Motion carried unanimously. F. Application for Service Retirement for Judy Skamiera, Lead Bus Driver, Senior Center Motion by Henig, supported by Varney, to receive and file the application for service retirement for Judy Skamiera, Lead Bus Driver, Senior Center. Ayes: All. Motion carried unanimously. G. Application for Service Retirement for Thomas Striewski, Probation Officer, 41-A District Court Motion by Henig, supported by Marsh, to receive and file the application for service retirement for Thomas Striewski, Probation Officer, 41-A District Court. Ayes: All. Motion carried unanimously. H. Application for Service Retirement for Mark Dyer, Lead Engineering Inspector, Office of Engineering Motion by Baker, supported by Varney, to receive and file the application for service retirement for Mark Dyer, Lead Engineering Inspector, Office of Engineering. Ayes: All. Motion carried unanimously. I. Application for Service Retirement for Nancy Zaleski (f/k/a Stringfield), Senior Clerk, Office of City Clerk Motion by Baker, supported by Marsh, to receive and file the application for service retirement for Nancy Zaleski (f/k/a Stringfield), Senior Clerk, Office of City Clerk. Ayes: All. Motion carried unanimously. J. Application for Service Retirement for Elaine Szlaga, Administrative Assistant, Office of Purchasing Motion by Varney, supported by Baker, to receive and file the application for service retirement for Elaine Szlaga, Administrative Assistant, Office of Purchasing. Ayes: All. Motion carried unanimously. K. Application for Service Retirement for Pamela McLean, Deputy Court Clerk, 41-A District Court Motion by Henig, supported by Marsh, to receive and file the application for service retirement for Pamela McLean, Deputy Court Clerk, 41-A District Court. Ayes: All. Motion carried unanimously. L. Application for Service Retirement for Kim Hill, Custodian, Facilities Maintenance Motion by Henig, supported by Baker, to receive and file the application for service retirement for Kim Hill, Custodian, Facilities Maintenance. Ayes: All. Motion carried unanimously. M. Application for Service Retirement Under ERIP for Joseph Sturza, Broadcast Services Coordinator Motion by Varney, supported by Weiler, to receive and file the application for service retirement under the ERIP (Early Retirement Incentive Program), for Joseph Sturza, Broadcast Services Coordinator, Community Relations. Ayes: All. Motion carried unanimously. N. Updated IRC Section 402 Rollover Notice Michaud explained that the notice required updating after the State of Michigan commenced the taxation of municipal pensions effective January 1, 2012. Motion by Varney, supported by Weiler, to receive and approve the updated IRC Section 402 Rollover Notice and following resolution as recommended by Pension Counsel VanOverbeke, Michaud and Timmony P.C. Ayes: All. Motion carried unanimously. R E S O L U T I O N 12-01 Adopted: April 19, 2012 Re: Notice to recipients of lump sum distributions from the Retirement System WHEREAS, the Board of Trustees is vested with the authority and fiduciary responsibility for the administration, management and operation of the Retirement System, and WHEREAS, the Board of Trustees acknowledges that Section 402 of the Internal Revenue Code requires the Board to provide notice to recipients of lump sum distributions from the Plan, and WHEREAS, applicable tax law and regulations require said notice to be provided at least thirty (30) days in advance of such distributions, and WHEREAS, legal counsel has prepared a distribution notice and form consistent with IRC Section 402, and WHEREAS, the Board of Trustees has discussed this matter, therefore be it RESOLVED, that the Retirement System is hereby amended to comply with and shall be administered in accordance with the requirements of the Economic Growth and Tax Relief Act of 2001; the Pension Protection Act of 2006; the Worker, Retiree, and the Employer Recovery Act of 2008 to: (1) allow participants to roll over amounts from an eligible employer plan to a Roth IRA, (2) allow non-spouse beneficiaries to roll over distributions to an IRA, and (3) provide relief from the 10% early withdrawal penalty for distributions from governmental defined benefit plans made to qualified public safety employees after separation from service after attainment of age 50, and further RESOLVED, that the Retirement System is hereby amended to comply with and shall be administered in accordance with the requirements of IRC Section 401(a)(9) and Treasury Regulations establishing the required minimum distribution rules for the Retirement System, and further RESOLVED, that the Board of Trustees hereby adopts the distribution notice and form, and further RESOLVED, that the Retirement System shall be administered consistent with said notice and IRS Notice 2009-68, and further RESOLVED, that the distribution notice and form be provided to recipients of lump sum distributions from the Retirement System consistent with the Internal Revenue Code, and further RESOLVED, that a copy of this resolution shall be provided to all appropriate parties. O. Gabriel Roeder Smith & Company Software Services Agreement for Benefit Calculator Discussion ensued regarding the proposal for new benefit calculator software required due to changes in mortality tables and changes to pension multipliers under a bridge calculation scenario. Baker requested Varney and Hessell to conduct a conference call with GRS and discuss the alternate proposals for the preparation of retirement calculations. By Board consensus the matter was tabled until the May regular meeting. P. Pension Administration Comments Motion by Varney, supported by Baker, to approve the agenda for May 24, 2012 special meeting as presented. Q. Trustee Comments – MAPERS 2012 Spring Conference Discussion ensued regarding the upcoming conference and due to a number of schedule conflicts no member of the Board will be in attendance. ADJOURN: Motion by Baker, supported by Weiler, to adjourn the meeting at 2:21 p.m. Ayes: All. Motion carried unanimously. Respectfully Submitted, ___________________________________ Brian Baker, Secretary