General Employees Retirement Board

OFFICIAL MINUTES OF REGULAR MEETING OF THE STERLING HEIGHTS GENERAL EMPLOYEE’S RETIREMENT SYSTEM Thursday, October 15, 2015 ___________________________________________________________________ __ _ ___ Location: Room – City Directors Conference Room #202 40555 Utica Road, Sterling Heights, MI 48313 Telephone: (586) 446-2331 Chairperson Weiler called the meeting to order at 1:32 p.m. BOARD MEMBERS PRESENT: Rich Weiler, Chairperson Brian Baker, Secretary Jennifer Varney, Treasurer Todd Marsh, Trustee BOARD MEMBERS ABSENT: None. ALSO PRESENT: Walt Hessell, Pension Administrator; Paul Henig, Trustee Elect (oath of office not yet taken as of meeting) Thomas Michaud, Legal Counsel, VanOverbeke, Michaud & Timmony, P.C. APPROVAL OF AGENDA: Motion by Marsh, supported by Varney, to approve the agenda as presented. Ayes: All. Motion carried unanimously. APPROVAL OF MINUTES: Motion by Baker, supported by Weiler, to approve the minutes of the regular meeting held September 17, 2015. Ayes: All. Motion carried unanimously. COMMUNICATION FROM CITIZENS: None APPROVAL OF TRUSTEE ELECTION RESULTS Motion by Baker, supported by Marsh to certify the trustee election results provided by the City Clerk as follows: Candidate # of Votes Election Results Paul Henig *by nomination Elected to 3-year term ending October 15, 2018 process *City Clerk Mark Carufel has formally notified the Pension Administration office that only one nomination for GERS Trustee – Paul Henig was received by the nomination deadline of September 28, 1 2015. Election protocol is such that no write in ballots are accepted during an election, thereby eliminating the need for a formal election and permitting Paul Henig to be sworn in as Trustee. ELECTION OF CHAIRPERSON / VICE CHAIR In follow up to the certification of election results in which Paul Henig was elected to a full three year trustee term expiring October 15, 2018, the Chairperson and Vice Chair positions are required to be filled for the current 2015/2016 year. Motion by Baker, supported by Marsh, to nominate and elect Trustee Richard Weiler as Chairperson and Treasurer Jennifer Varney as Vice Chairperson. Both candidates accepted the nomination. Ayes: All. Motion carried unanimously. REPORT FROM LEGAL COUNSEL No formal report. Michaud commented on items as they appeared on the agenda. CONSENT AGENDA: Motion by Varney, supported by Marsh, to receive and file consent items I A through I D-1. Ayes: All. Motion carried unanimously. I. RECEIVE AND FILE: A. Benefit register listing for October 1, 2015 from Comerica Bank showing 360 active retirees with a payout for September 2015 of $890,218.17 and a year-to-date payout of $9,573,614.61. B. Cash and Asset Statements as of September 30, 2015 from Comerica Bank and Morgan Stanley showing a total market value of $106,663,097.14 comprised as follows: Desired Allocation Asset Class / Percentage 0% Cash 0.91% Comerica Bank $ 971,305.70 16% Fixed Income 17.07% Boyd Watterson 18,208,856.12 8% Fixed Income 8.55% WAMCO 9,117,228.88 15% Small Cap 16.11% Earnest Partners 17,184,748.00 6.8% Large Cap Value 6.56% Herndon Capital 7,000,628.43 6.8% Large Cap Value 6.81% MFS 7,264,505.02 5% Large Cap Growth 4.81% AMI 5,126,789.09 5% Large Cap Growth 4.37% Winslow 4,665,605.87 3.4% Large Cap Growth 3.34% Janus Capital 3,566,906.98 8% Large Cap Core 8.51% London 9,072,457.98 5% Large Cap Core 5.07% S&P Index 5,407,828.02 8.5% Large Cap Global 7.89% INVESCO 8,410,917.09 8.5% Large Cap Global 8.02% Cambiar 8,555,915.89 4% REITS 1.98% Principal REIT 2,109,404.07 C. Correspondence 2  1. Morgan Stanley Fee & Revenue Year-End Report, June 30, 2015 2. August 28, 2015 Settlement Report – securities litigation. 3. Email correspondence and letters sent to Morgan Stanley and Comerica Bank dated September 17, 2015 regarding the transfer of funds for the payment of benefits. 4. Wire transfer notification received from Morgan Stanley dated September 24, 2015 regarding the transfer of funds for the payment of benefits. 5. “Pension & Investments” magazines dated September 21 and October 5, 2015. D. 1. Payable from System Assets for the service period ending December 31, 2015. Quarterly management fees from Boyd Watterson in the amount of $6,829. . REGULAR AGENDA: II. NEW BUSINESS: A. Pension Administration Comments 1. Hessell presented the draft agenda for the special meeting of December 2, 2015. Hessell would check with Tim Brice, Morgan Stanley as to whether or not any manager underperformance would need to be addressed at the meeting. Motion by Baker, supported by Marsh, to approve the agenda for the December 2, 2015 special meeting as presented. Ayes: All. Motion carried unanimously. 2. Hessell stated that the Annual Retiree / Beneficiary Verification process had reached 94% compliance and that the second mailing would be sent out to the remaining 22 members who had not yet responded. Board dialogue centered on the necessity of the verification process and how in the past it had prevented overpayments to deceased members. B. Trustee Comments - Varney briefed the Board as to the request by Morgan Stanley to modify the consulting contract so that money manager fees could be billed and paid at the beginning of the calendar quarters for administrative ease. Discussion ensued with regard to the pros and cons of making the change. By Board consensus, it was decided that the current practice of billing and paying the invoice subsequent to the quarter that the services were rendered would be continued. Varney would inform Morgan Stanley of the decision. . ADJOURN: Motion by Varney, supported by Weiler, to adjourn the meeting at 1:52 p.m. Ayes: All. Motion carried unanimously. Respectfully Submitted, ___________________________________ Brian Baker, Secretary 3