General Employees Retirement Board

OFFICIAL MINUTES OF REGULAR MEETING OF THE STERLING HEIGHTS GENERAL EMPLOYEE’S RETIREMENT SYSTEM Thursday, June 18, 2015 ___________________________________________________________________ __ _ ___ Location: Room – City Finance Conference Room #204 40555 Utica Road, Sterling Heights, MI 48313 Telephone: (586) 446-2331 Acting Chairperson Baker called the meeting to order at 1:35 p.m. BOARD MEMBERS PRESENT: Brian Baker, Acting Chairperson Jennifer Varney, Acting Secretary, Treasurer Paul Henig, Trustee BOARD MEMBERS ABSENT: Rich Weiler, Chairperson (excused) Todd Marsh, Trustee (excused) ALSO PRESENT: Thomas Michaud, Legal Counsel, VanOverbeke Michaud &Timmony, P.C.; Walt Hessell, Pension Administrator APPROVAL OF AGENDA: Motion by Varney, supported by Henig, to approve the agenda as presented. Ayes: All. Motion carried unanimously. APPROVAL OF MINUTES: Motion by Henig, supported by Varney, to approve the minutes of the regular meeting held May 21, 2015 and the special meeting of May 27, 2015. Ayes: All. Motion carried unanimously. COMMUNICATION FROM CITIZENS: None REPORT FROM LEGAL COUNSEL Michaud requested that the Board recess to closed session to discuss securities litigation. Motion by Varney, supported by Henig, to recess to closed session for the purposes of discussing litigation. Roll call vote: Weiler: Absent (excused) Marsh: Absent (excused) Baker: Aye Varney: Aye 1 Henig: Aye Board recessed to closed session. Separate minutes of the closed session were compiled. Board reconvened from closed session. Motion by Varney, supported by Baker, to authorize Michaud to take the appropriate action to establish lead plaintiff status in the SanDisk Corporation securities litigation matter. Ayes: All. Motion carried unanimously. Michaud also commented on items as they appeared on the agenda. CONSENT AGENDA: Motion by Henig, supported by Varney, to receive and file consent items I A through I C as presented. Ayes: All. Motion carried unanimously. I. RECEIVE AND FILE: A. Benefit register listing for June 1, 2015 from Comerica Bank showing 358 active retirees with a payout for May 2015 of $875,674.35 and a year-to-date payout of $5,659,928.64. B. Cash and Asset Statements as of May 31, 2015 from Comerica Bank and Morgan Stanley showing a total market value of $118,816,956.38 comprised as follows: Desired Market Value Allocation Asset Class / Percentage 0% Cash 0.96% Comerica Bank $1,146,139.63 16% Fixed Income 15.34% Boyd Watterson 18,224,853.43 8% Fixed Income 7.72% WAMCO 9,166,213.06 15% Small Cap 16.53% Earnest Partners 19,642,958.52 6.8% Large Cap Value 6.62% Herndon Capital 7,865,944.19 6.8% Large Cap Value 6.69% MFS 7,942,456.37 5% Large Cap Growth 4.88% Victory 5,803,957.16 5% Large Cap Growth 4.99% Winslow 5,927,698.60 3.40% Large Cap Growth 3.40% Janus Capital 4,039,785.82 8% Large Cap Core 8.29% London 9,851,488.71 5% Large Cap Core 5.02% S&P Index 5,965,419.96 8.5% Large Cap Global 7.61% INVESCO 9,046,443.45 8.5% Large Cap Global 8.93% Allianz - NFJ 10,606,343.95 4% REITS 3.02% Principal REIT 3,587,253.53 C. Correspondence 1. Litigation report as of March 31, 2015 – Caterpillar & Prudential. 2. Form ADV Part 2A dated April 2015 – Winslow Capital 3. Class Action Settlement Report dated April 24, 2015. 2  4. Form ADV Part 2A dated May 2015 – Boyd Watterson. 5. Email correspondence and letter dated May 21, 2015 sent to Morgan Stanley regarding the transfer of funds for the payment of benefits. 6. Email correspondence and letters dated May 21, 2015 sent to Morgan Stanley for the authorization to pay money manager fees. 7. Summary memorandum of the securities litigation matter with SanDisk dated May 28, 2015 sent to City Manager (confidential). 8. Email correspondence and termination letter dated June 11, 2015 sent to Victory Capital. 9. Email correspondence and authorization letter dated June 11, 2015 regarding the hiring of AMI Asset Management. 10. “Pension & Investments” magazines dated May 18 and June 1, 2015. REGULAR AGENDA: II. OLD BUSINESS A. Annual Review of Adjustments to “Initial 70% AFC Limit” for Gross Monthly Pensions Motion by Henig, supported by Varney, to acknowledge the increase of the “Initial 70% AFC Limit” effective July 1, 2015 and the increase of the gross monthly pensions payable August 1, 2015 as detailed in the following table: Name Revised 70% AFC Revised Gross Monthly Pension D. Mike Dickey $5,599.71 $5,207.01 Larry D’Angelo $4,089.94 $3,451.20 Frank Gorlitz $4,110.88 $3,946.40 Tina Hotton $3,100.49 $3.039.94 Edward Piet $4,504.58 $4,504.58 Mefford Couch $6,462.13 $5,640.76 James Carpenter $6,042.55 $4,569.94 Robert Ervin $5,921.90 $4,809.60 Judith Kotulis $4,705.07 $4,170.91 Thomas Hlivka $5,082.35 $4,512.99 Dan Browning $5,249.83 $4,042.61 Theodore Boehmer $8,071.95 $6,588.61 Colleen Muraszewski $4,188.38 $3,668.12 Ayes: All. Motion carried unanimously. B. Update of Revised FOIA Policy Varney briefed the Board as to the status of the pending City FOIA policy. The City FOIA policy had been recently amended as required by law and was nearing final completion and approval. Varney recommended that the Board adopt key provisions of the revised City FOIA policy as much as possible for the sake of administrative efficiencies. Michaud concurred with the 3  recommendation and suggested that the Board act to adopt the revised City FOIA policy even though final approval was still pending as of the meeting date. Motion by Varney, supported by Baker, to appoint Walt Hessell, Pension Administrator, as the official FOIA Coordinator and to adopt the current pending City FOIA policy as the official FOIA policy for the GERS. Ayes: All. Motion carried unanimously. III. NEW BUSINESS: A. Pension Administration Comments - None B. Trustee Comments - None . ADJOURN: Motion by Varney, supported by Baker, to adjourn the meeting at 1:46 p.m. Ayes: All. Motion carried unanimously. Respectfully Submitted, _____________________________________ Jennifer Varney, Acting Secretary / Treasurer 4