General Employees Retirement Board

OFFICIAL MINUTES OF REGULAR MEETING OF THE STERLING HEIGHTS GENERAL EMPLOYEE’S RETIREMENT SYSTEM Thursday, May 15, 2014 ___________________________________________________________________ __ _ __ _ 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: Brian Baker, Acting Chairperson Jennifer Varney, Acting Secretary / Treasurer Paul Henig, Trustee Todd Marsh, Trustee BOARD MEMBERS ABSENT: Richard Weiler, Chairperson (Excused) ALSO PRESENT: Walt Hessell, Pension Administrator; Thomas Michaud, VanOverbeke Michaud & Timmony, P.C. APPROVAL OF AGENDA: Motion by Marsh, supported by Henig, to approve agenda as amended for the inclusion of a money manager invoice under Consent Agenda Item I. D. 3. Ayes: All. Motion carried unanimously. APPROVAL OF MINUTES: Motion by Varney, supported by Henig, to approve the minutes of the regular meeting held April 17, 2014. Ayes: All. Motion carried unanimously. COMMUNICATION FROM CITIZENS: None REPORT FROM LEGAL COUNSEL –Recent Legal Issues & Decisions Update: Tom Michaud reviewed the recent legal issues and decisions update memo with the Board. The memo provided an overview of recent legal decisions of interest to Michigan public retirement and healthcare plans, many of them still in the appeals process. Michaud reiterated the importance of pension system boards adhering to their established policies and plan documents when governing the pension systems in an effort to avoid costly litigation. Michaud then commented on the indemnification of trustees normally supported by plan document or city ordinance language. Motion by Marsh, supported by Henig, to receive and file the recent legal issues and decisions update memo prepared by VanOverbeke Michaud & Timmony, P.C. Ayes: All. Motion carried unanimously. Michaud also commented on items as they appeared on the agenda. CONSENT AGENDA: Motion by Marsh, supported by Varney, to receive and file consent items I A through I D. Ayes: All. Motion carried unanimously. I. RECEIVE AND FILE: A. Benefit register listing for May 1, 2014 from Comerica Bank showing 348 active retirees with a payout for April 2014 of $840,166.73 and a year-to-date payout of $4,255,910.83. B. Cash and Asset Statements as of April 30, 2014 from Comerica Bank and Merrill Lynch showing a total market value of $116,245,308.45 comprised as follows: Desired Actual Bank/Money Market Allocation Percentage Manager Value 0% 0.75% Comerica Bank $870,925.40 21.33% 15.42% PIMCO 17,921,415.54 10.67% 7.60% McDonnell 8,828,128.22 15% 15.28% Earnest Partners 17,757,862.09 8% 9.11% Herndon Capital 10,593,362.84 8% 9.49% MFS 11,032,865.20 5.33% 7.15% Victory 8,316,751.92 5.33% 7.07% Winslow 8,220,350.56 5.33% 7.03% Janus Capital 8,175,956.73 8.5% 7.56% Thornburg 8,788,933.84 8.5% 9.25% Allianz - NFJ 10,747,673.40 Cohen & Steers – 4% 4.29% 4,991,082.71 REIT C. Correspondence 1. Allianz Managed Accounts Trust Prospectus dated March 19, 2014. 2. Form ADV Brochures received from McDonnell Investment dated April 11, 2014. 3. Letter and email correspondence with Merrill Lynch dated April 17, 2014 regarding the transfer of funds for the payment of benefits. 4. Four Form ADV Brochures received from Merrill Lynch dated April 21, 2014. 5. Wire transfer confirmations received from Merrill Lynch dated April 24, 2014 regarding the transfer of funds for the payment of benefits. 6. Letter to City of Utica on behalf of William J. Lang – Transfer of Service under Act 88. 7. “Pension & Investments” magazines dated April 14 & 28, 2014. D. Approve Invoices for Payment 1. Payable from System Assets for the quarterly service period ending June 30, 2014 through Merrill Lynch Consults Quarterly management fees from Janus in the amount of $16,261.65; from Earnest Partners in the amount of $33,490.76; from PIMCO in the amount of $19,910.19; from MFS in the amount of $20,606.10; from Thornburg in the amount of $14,178.94; from Victory in the amount of $13,467.58; from Winslow in the amount of $13,731.18; from NFJ in the amount of $18,468.26; from Herndon in the amount of $16,355.67 and from McDonnell in the amount of $1,734.64. 2. Payable from City Assets for the quarterly service period ending March 31, 2014 Quarterly investment consultant fees from Merrill Lynch – Consults in the amount of $6,485.33 and custodial banking fees from Comerica Bank in the amount of $4,663.72. Actuarial EDRO calculation fees from Gabriel Roeder Smith & Company in the amount of $1,250.00 (to be reimbursed by participant and alternate payee – April 22, 2014 report) 3. Payable from System Assets for the quarterly service period ending March 31, 2014 Quarterly management fees from McDonnell Investment in the amount of $4,937.71. REGULAR AGENDA: II. OLD BUSINESS: A. One-Time $500 Payment for Sterling Heights Police Clerical Association Retirees Motion by Henig, supported by Varney, to receive and file the summary update for the one-time $500 payment for Sterling Heights Police Clerical Association Retirees showing no payments due for the June 1, 2014 payout date. Ayes: All. Motion carried unanimously. B. EDRO Alternate Payee Information for Sherri Coffin (William Coffin, Department of Public Works Motion by Henig, supported by Marsh, to approve the EDRO alternate payee benefit for Sherri Coffin (William Coffin, Department of Public Works) effective March 31, 2014 with the monthly pension amount of $1,551.94 under straight life without annuity withdrawal. Ayes: All. Motion carried unanimously. III. NEW BUSINESS A. Pension Administration Comments 1. Annual Update and Review RFP Status – Service Providers Motion by Marsh, supported by Henig, to receive and file the Annual Update and Review RFP (request for proposals) Status – Service Providers. Ayes: All. Motion carried unanimously. Motion by Varney, supported by Marsh, to waive the formal five- year RFP process for VanOverbeke Michaud & Timmony, P.C. (legal counsel) due to their exceptional service at or near the original contract fee schedule price and to extend their service contract. Ayes: All. Motion carried unanimously. Motion by Varney, supported by Henig, to waive the formal five- year RFP process for Medical Evaluation Specialists (medical review – disability pensions) due to their exceptional service at or near the original contract fee schedule price and to extend their service contract. Ayes: All. Motion carried unanimously. 2. Money Managers Contact List Update Motion by Marsh, supported by Henig, to receive and file the Money Manager Contact List Update for the GERS. Ayes: All. Motion carried unanimously. 3. Board of Trustees Contact List Update (confidential) Motion by Varney, supported by Marsh, to receive and file the Board of Trustees Contact List Update for the GERS. Ayes: All. Motion carried unanimously. 4. Service Providers Contact List Update Motion by Henig, supported by Varney, to receive and file the Service Providers Contact List Update for the GERS. Ayes: All. Motion carried unanimously. 5. Review of Proposed 2014 / 2015 GERS Meeting Schedule Motion by Marsh, supported by Henig, to approve the proposed 2014 / 2015 GERS meeting schedule. Ayes: All. Motion carried unanimously. C Trustee Comments - None ADJOURN: Motion by Varney, supported by Baker, to adjourn the meeting at 2:22 p.m. Ayes: All. Motion carried unanimously. Respectfully Submitted, ___________________________________ Jennifer Varney, Acting Secretary / Treasurer