General Employees Retirement Board

UNOFFICIAL MINUTES OF REGULAR MEETING OF THE STERLING HEIGHTS GENERAL EMPLOYEE’S RETIREMENT SYSTEM Thursday, September 20, 2012 ________________________________________________________________ Location: Room #201 •†40555 Utica Road, Sterling Heights, MI 48313 • (586) 446-2331 Chairperson Weiler called the meeting to order at 1:32 p.m. BOARD MEMBERS PRESENT: Richard Weiler, Chairperson Jennifer Varney, Acting Secretary / Treasurer Todd Marsh, Trustee BOARD MEMBERS ABSENT: Brian Baker, Secretary (excused) Paul Henig, Trustee (excused) ALSO PRESENT: Walt Hessell, Pension Administrator; Thomas Michaud, Legal Counsel, VanOverbeke, Michaud & Timmony, P.C. APPROVAL OF AGENDA: Motion by Varney, supported by Marsh, to approve the agenda as presented. Ayes: All. Motion carried unanimously. APPROVAL OF MINUTES: Motion by Varney, supported by Marsh, to approve the minutes of the regular meeting held August 16, 2012 and the special meeting held August 22, 2012. Ayes: All. Motion carried unanimously. COMMUNICATION FROM CITIZENS: None REPORT FROM LEGAL COUNSEL: No formal report. Michaud commented on issues as they appeared on the agenda and briefly noted that House Bill 797 had recently passed and that a formal update would be provided at an upcoming meeting. CONSENT AGENDA: Motion by Marsh, supported by Varney, to receive and file consent items I A through I D-19. Ayes: All. Motion carried unanimously. I. RECEIVE AND FILE: Benefit register listing for September 1, 2012 from Comerica Bank showing 347 active retirees with a payout for August 2012 of $804,724.56 and a year-to-date payout of $6,960,444.45. Cash and Asset Statements as of August 31, 2012 from Comerica Bank and Merrill Lynch showing a total market value of $106,588,430.58 comprised as follows:  Desired Actual Bank/Money Manager Market Value Allocation Percentage 0% 0.81% Comerica Bank $865,313.75 16% 16.00% PIMCO 17,058,287.66 16% 15.27% McDonnell 16,280,456.22 15% 13.50% Earnest Partners 14,387,788.58 8% 7.34% M. D. Sass 7,822,758.39 8% 7.16% MFS 7,632,416.14 5.33% 6.21% Victory 6,623,227.57 5.33% 6.28% Winslow 6,690,794.27 5.33% 6.54% Janus Capital 6,965,723.23 8.5% 8.25% Thornburg 8,795,233.20 8.5% 8.65% Allianz - NFJ 9,218,069.28 Cohen & Steers – 4% 3.99% 4,248,362.29 REIT C. Securities Lending Income Summary showing $40.61 collected fiscal year-to-date as compared to $412.12 last fiscal year-to-date. D. Correspondence 1. Portfolio Monitoring Report – quarter ended March 31, 2012. 2. Litigation Report – quarter ended June 30, 2012. 3. Email correspondence and letters sent to Merrill Lynch and Comerica Bank dated August 16, 2012 regarding the transfer of funds for the payment of benefits. 4. Email correspondence and authorization letters sent to Comerica Bank dated August 16, 2012 regarding the payment of money manager fees. 5. Email correspondence with Comerica Bank dated August 17, 2012 regarding securities lending activity. 6. Wire transfer notification received from Merrill Lynch dated August 22, 2012 regarding the transfer of funds for the payment of benefits. 7. Email correspondence dated August 24, 2012 regarding an update on the Prudential Financial Securities Litigation. 8. Letter received from Robbins Geller Rudman & Dowd LLP dated August 27, 2012 regarding request for presentation to the GERS Board. 9. Memo sent to City Clerk dated August 28, 2012 requesting GERS Trustee election. 10. Class Action Settlement Claims Due October 2012. 11. Enrollment in class action settlement service received from Merrill Lynch dated September 4, 2012. 12. Notification of account set up received from Merrill Lynch dated September 4, 2012. 13. Termination letter sent to MD Sass dated September 5, 2012. 14. Email correspondence and letter sent to Comerica Bank dated September 5, 2012 regarding termination of securities lending program. 15. Email correspondence and draft letters received from Merrill Lynch dated September 5, 2012 regarding termination of MD Sass. 16. Email confirmation received from Comerica Bank dated September 6, 2012 regarding termination of security lending program. 17. Memo received from City Clerk dated September 10, 2012 regarding GERS Trustee candidate nomination and election details. 18. "Pension & Investments" magazines dated August 6 & 20 and September 3, 2012. 19. "Employee Benefit News" magazine dated August 2012. REGULAR AGENDA: II. OLD BUSINESS: A. Retirement Information Under ERIP for L. Jerry Jackson, Appraiser III, Office of Assessing Motion by Varney, supported by Marsh, to approve the service retirement under ERIP (Early Retirement Incentive Program) for L. Jerry Jackson, Appraiser III, Office of Assessing, effective July 28, 2012 with service credit of 13 years, two months and the monthly pension amount of $1,853.73 under option A 100% pop- up without annuity withdrawal based upon a monthly final average compensation of $6,669.40. Ayes: All. Motion carried unanimously. B. Retirement Information Under ERIP for Carolyn Galazka, Administrative Assistant, Fire Department Motion by Marsh, supported by Varney, to approve the service retirement under ERIP (Early Retirement Incentive Program) for Carolyn Galazka, Administrative Assistant, Fire Department, effective July 18, 2012 with service credit of 22 years, eight months and the monthly pension amount of $2,181.75 under option A 100% pop – up with annuity withdrawal based upon a monthly final average compensation of $4,802.82. Ayes: All. Motion carried unanimously. C. Retirement Information Under ERIP for Susan Woodward, Library Circulation Supervisor, City Library Motion by Varney, supported by Marsh, to approve the service retirement under ERIP (Early Retirement Incentive Program) for Susan Woodward, Library Circulation Supervisor, City Library effective August 21, 2012 with service credit of 27 years, six months and the monthly pension amount of $3,174.98 under option A 100% pop-up with annuity withdrawal based upon a monthly final average compensation of $5,573.48. Ayes: All. Motion carried unanimously. D. Retirement Information Under ERIP for Valerie Bondy, Clerk Typist, Department of Public Works Motion by Marsh, supported by Varney, to approve the service retirement under ERIP (Early Retirement Incentive Program) for Valerie Bondy, Clerk Typist, Department of Public Works effective July 17, 2012 with service credit of 14 years, one month and the monthly pension amount of $1,211.38 under option B 50% pop -up without annuity withdrawal based upon a monthly final average compensation of $3,929.79. Ayes: All. Motion carried unanimously. III. NEW BUSINESS: A. Pension Administration Comments 1. Update on Annual Retiree / Beneficiary Verification – Hessell stated that the first mailing commenced on September 10th and the second follow up mailing would occur on October 10th if needed. 2. GERS Summary Annual Report - was prepared and distributed to all active members during the month of September. 3. Update of Large Capitalization Value Equity Managers -Hessell confirmed that the transition of assets from MD Sass to Herndon Capital was substantially complete. 4. Change in Custodian Platform McDonnell Investments – Varney described the administrative efficiencies that would be gained from moving to the Merrill Lynch platform and stated that The Brice Group was in the process of making the change. 5. Update on GERS Trustee Nomination / Election – Hessell informed the Board that the nomination process would conclude at 5:00 p.m. on Monday September 24th and that one nomination had thus far been received by the City Clerk. Trustee Comments – None ADJOURN: Motion by Varney, supported by Marsh, to adjourn the meeting at 1:53 p.m. Ayes: All. Motion carried unanimously. Respectfully Submitted, Jennifer Varney, Acting Secretary / Treasurer