General Employees Retirement Board

OFFICIAL MINUTES OF REGULAR MEETING OF THE STERLING HEIGHTS GENERAL EMPLOYEE’S RETIREMENT SYSTEM Thursday, May 21, 2015 ___________________________________________________________________ __ _ ___ Location: Room – City Directors Conference Room #202 40555 Utica Road, Sterling Heights, MI 48313 Telephone: (586) 446-2331 Acting Chairperson Varney called the meeting to order at 1:30 p.m. BOARD MEMBERS PRESENT: Jennifer Varney, Acting Chairperson, Acting Secretary, Treasurer Todd Marsh, Trustee Paul Henig, Trustee BOARD MEMBERS ABSENT: Rich Weiler, Chairperson (excused) Brian Baker, Secretary (excused) ALSO PRESENT: Thomas Michaud, Legal Counsel, VanOverbeke Michaud &Timmony, P.C.; Walt Hessell, Pension Administrator APPROVAL OF AGENDA: Motion by Marsh, supported by Henig, to approve the agenda as presented. Ayes: All. Motion carried unanimously. APPROVAL OF MINUTES: Motion by Marsh, supported by Henig, to approve the minutes of the regular meeting held April 16, 2015 Ayes: All. Motion carried unanimously. COMMUNICATION FROM CITIZENS: None REPORT FROM LEGAL COUNSEL Michaud distributed a FOIA policy and procedures memo with regard to the impending amendments to the Michigan Freedom of Information Act. Michaud recommended that the Board review the materials and then determine a means to merge the new policy with the overall City Management FOIA policy. Varney stated that the City Management FOIA policy would be finalized soon and that the matter should be able to be addressed at the June regular Board meeting in time for the July 1st, 2015 effective date requirement. Motion by Marsh, supported by Varney to receive and file the FOIA policy and procedures draft memo form VanOverbeke, Michaud & Timmony, P.C. Michaud then handed out the 2015 legal case update memo and pointed out the importance of the Board consistently following established policies and procedures to avoid costly litigation events. 1 Michaud also commented on items as they appeared on the agenda. CONSENT AGENDA: Motion by Marsh, supported by Henig, to receive and file consent items I A through I D-2 as presented. Ayes: All. Motion carried unanimously. I. RECEIVE AND FILE: A. Benefit register listing for May 1, 2015 from Comerica Bank showing 359 active retirees with a payout for April 2015 of $900,467.73 and a year-to-date payout of $4,317,335.46. B. Cash and Asset Statements as of April 30, 2015 from Comerica Bank and Morgan Stanley showing a total market value of $119,126,366.63 comprised as follows: Desired Market Value Allocation Asset Class / Percentage 0% Cash 2.04% Comerica Bank $2,430,270.43 16% Fixed Income 15.36% Boyd Watterson 18,292,323.43 8% Fixed Income 6.87% WAMCO 8,190,999.12 15% Small Cap 16.80% Earnest Partners 20,008,780.24 6.8% Large Cap Value 6.67% Herndon Capital 7,946,248.94 6.8% Large Cap Value 6.55% MFS 7,798,357.24 5% Large Cap Growth 4.78% Victory 5,692,442.06 5% Large Cap Growth 4.88% Winslow 5,819,451.95 3.40% Large Cap Growth 3.33% Janus Capital 3,966,045.49 8% Large Cap Core 8.22% London 9,788,664.33 5% Large Cap Core 4.94% S&P Index 5,888,810.70 8.5% Large Cap Global 7.60% INVESCO 9,056,085.90 8.5% Large Cap Global 8.95% Allianz - NFJ 10,657,061.08 4% REITS 3.01% Principal REIT 3,590,825.72 C. Correspondence 1. Letter correspondence with Morgan Stanley dated April 16, 2015 regarding the transfer of funds for the payment of benefits. 2. Form ADV Brochure received from Victory Capital dated March 30, 2015. 3. Form ADV Brochure received from INVESCO Advisors dated March 31, 2015. 4. Form ADV Brochure received from Allianz Global Advisors dated April 2015. 5. Form ADV Brochures received from MFS Institutional dated April 2015. 6. Form ADV Brochure received from Principal Global Advisors dated April 23, 2015. 7. Form ADV Brochure received from Janus Capital dated April 27, 2015. 8. Four Form ADV Brochures received from Merrill Lynch dated April 21, 2014. 9. MES Solutions updated contact list dated January 2015. 10. “Pension & Investments” magazines dated April 6 & 20 and May 4, 2015. D. Approve Invoices for Payment 1. Payable from System Assets for the quarterly service period ending March 31, 2015 2  Quarterly management fees from Morgan Stanley in the amount of $24,746.20 and from Boyd Watterson in the amount of $7,365.00 2. Payable from City Assets for the quarterly service period ending March 31, 2015 Quarterly custodial banking fees from Comerica Bank in the amount of $4,767.42. REGULAR AGENDA: II. OLD BUSINESS A. One-Time $500 Payment for Sterling Heights Police Clerical Association Retirees Motion by Henig, supported by Marsh, 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, 2015 payout date. Ayes: All. Motion carried unanimously. B. Actuarial Cost Study Motion by Varney, supported by Marsh, to receive and file the actuarial cost study pursuant to the new labor agreement pension benefit changes with regard to the transfer of the Emergency Dispatch Unit.. Ayes: All. Motion carried unanimously. III. NEW BUSINESS: A. Eligible Domestic Relations Order (EDRO) for Richard Hardin Motion by Marsh, supported by Henig, to receive and file the Divorce Action / Eligible Domestic Relations Order (EDRO) Richard Hardin vs. Lora Hardin as approved by pension counsel and to forward a copy to the Custodian Bank Comerica. Ayes: All. Motion carried unanimously. B. Application for Service Retirement for Richard Hardin, Water Division Supervisor, Department of Public Works Motion by Marsh, supported by Henig, to receive and file the application for service retirement for Richard Hardin, Water Division Supervisor, Department of Public Works Ayes: All. Motion carried unanimously. C Change in Survivor Beneficiary Status – Judy A. Jones (Deceased) Motion by Henig, supported by Marsh, to approve termination of benefits for survivor beneficiary Judy A. Jones, due to her death on December 14, 2014. 3  Ayes: All. Motion carried unanimously. D Application for Service Retirement, Thomas Dupre, Equipment Operator B, Department of Public Works Motion by Marsh, supported by Hening, to receive and file the application for service retirement for Thomas Dupre, Equipment Operator B, Department of Public Works. Ayes: All. Motion carried unanimously E. Application for Service Retirement, Salvatore Conigliaro, Director of Public Works Motion by Henig, supported by Varney, to receive and file the application for service retirement, Salvatore Conigliaro, Director of Public Works. Ayes: All. Motion carried unanimously. F. Application for Service Retirement, Mary Tackett, Program Assistant, Senior Center Motion by Marsh supported by Henig, to receive and file the application for service retirement, Mary Tackett, Program Assistant, Senior Center. Ayes: All. Motion carried unanimously. G. Pension Administration Comments 1. Annual Update & Review RFP Status – Service Providers Pursuant to Resolution 00-2 the Board will periodically review the costs and services of each of its advisors. Hessell reviewed the annual RFP schedule and stated that the actuarial services were currently up for review. Varney stated that the Police & Fire Retirement System had just concluded a full actuarial firm RFP and it was found that Gabriel Roeder Smith & Co was neither the lowest or highest bidder. In Varney’s opinion GRS offered the best value of services for fees rendered. Motion by Varney, supported by Marsh, to receive and file the annual update and review RFP (request for proposal) status – service providers report. Ayes: All. Motion carried unanimously. Motion by Varney, supported by Marsh, to waive the formal five-year RFP process for Gabriel Roeder Smith & Co., (actuarial firm) 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. Review of Proposed 2015 / 2016 GERS Meeting Schedule Motion by Marsh, supported by Henig, to approve the proposed 2015 /2016 GERS Meeting Schedule. Ayes: All. Motion carried unanimously. 4 H. Trustee Comments Varney recommended to the Board that the annual actuarial funding valuation be changed from a December 31 valuation date to the June 30 fiscal year date effective with the upcoming June 30, 2015 fiscal- year end. Once this change is confirmed with the system actuary, the matter will be brought to the Board for official approval. Varney explained how there would be a savings of actuarial fees and Pension Administrator’s work hours by combining the valuation along with the GASB 67 & 68 disclosure reports. The change would also make the funding valuation report available to the Finance & Budget Director on a more timely basis with regard to the annual budget. . ADJOURN: Motion by Marsh, supported by Varney, to adjourn the meeting at 2:38 p.m. Ayes: All. Motion carried unanimously. Respectfully Submitted, ___________________________________ Jennifer Varney, Acting Chairperson / Acting Secretary / Treasurer 5