General Employees Retirement Board

OFFICIAL MINUTES OF REGULAR MEETING OF THE STERLING HEIGHTS GENERAL EMPLOYEE’S RETIREMENT SYSTEM Thursday, October 19, 2017 ___________________________________________________________________ __ _ ___ Location: Room #101 40555 Utica Road, Sterling Heights, MI 48313 (586) 446-2331 Chairperson Weiler called the meeting to order at 1:34 p.m. BOARD MEMBERS PRESENT: Richard Weiler, Chairperson Jennifer Varney, Secretary Mary Jaganjac, Treasurer Todd Marsh, Trustee Paul Henig, Trustee BOARD MEMBERS ABSENT: None. ALSO PRESENT: Walt Hessell, Pension Administrator; 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 Varney, supported by Henig, to approve the minutes of the regular meeting held September 21, 2017. Ayes: All. Motion carried unanimously. COMMUNICATION FROM CITIZENS: None APPROVAL OF TRUSTEE ELECTION RESULTS 1 Motion by Henig, supported by Varney to certify the trustee election results provided by the City Clerk as follows: Candidate # of Votes Election Results Todd Marsh *by nomination Elected to 3-year term ending October 15, 2020 process *City Clerk Melanie Ryska has formally notified the Pension Administration office that only one nomination for GERS Trustee – Todd Marsh was received by the nomination deadline of October 6, 2017. Election protocol is such that no write in ballots are accepted during an election, thereby eliminating the need for a formal election and permitting Todd Marsh to be sworn in as Trustee. ELECTION OF CHAIRPERSON / VICE CHAIR In follow up to the certification of election results in which Todd Marsh was elected to a full three year trustee term expiring October 15, 2020, the Chairperson and Vice Chair positions are required to be filled for the current 2017/2018 year. Motion by Henig, supported by Marsh, to nominate and elect Trustee Richard Weiler as Chairperson and Finance & Budget Director Jennifer Varney as Vice Chairperson. Both candidates accepted the nomination. Ayes: All. Motion carried unanimously. REPORT FROM LEGAL COUNSEL Michaud briefed the Board with regard to the securities litigation claims and recovery efforts. Routinely the Board has pursued recoveries as lead plaintiff status to ensure the best financial outcome. Legal action is taken where corporate malfeasance or gross mismanagement is apparent and fees are structured under a contingency basis. Michaud noted the current trend in Courts which are requiring a higher burden of proof upon the plaintiffs in order to prevent dismissals of the cases. Michaud believes that the Board has demonstrated its commitment to dual fiduciary responsibility both as Trustees of the system and as shareholders of the companies that action is taken against. 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 C-12. Ayes: All. Motion carried unanimously. I. RECEIVE AND FILE: A. Benefit register listing for October 1, 2017 from Comerica Bank showing 362 active retirees with a payout for September 2017 of $906,999.00 and a year-to-date payout of $9,046,110.71. B. Cash and Asset Statements as of September 30, 2017 from Comerica Bank and Morgan Stanley showing a total market value of $111,969,329.60 comprised as follows: 2  Desired Allocation Asset Class / Percentage 0% Cash 0.08% Comerica Bank $ 94,182.44 12% Fixed Income 11.84% Boyd Watterson 13,262,608.93 12% Fixed Income 12.56% WAMCO 14,065,712.80 11% Small Cap 14.41% Earnest Partners 16,130,150.31 4% Large Cap Value 4.04% Confluence 4,526,334.00 4% Large Cap Value 3.64% MFS 4,073,511.41 3% Large Cap Value 2.54% iShares Val Index 2,839,618.11 4% Large Cap Growth 3.42% AMI 3,826,633.79 2% Large Cap Growth 1.93% Winslow 2,155,344.79 3% Large Cap Growth 2.68% Janus Capital 2,994,141.68 2% Large Cap Growth 1.98% iShares Gr Index 2,216,188.26 6% Large Cap Core 6.24% London 6,985,828.30 4% Large Cap Core 3.89% iShares S&P Index 4,350,901.86 10% Large Cap Global 8.88% INVESCO 9,948,131.38 10% Large Cap Global 9.11% Cambiar 10,204,603.66 3% Large Cap Global 3.01% Harding 3,375,613.49 3% Emerging Markets 2.52% Lazard / HLMEX 2,821,464.14 2% REITS 2.23% Principal REIT 2,495,429.30 5% MLP’s 5.00% Cushing Asset Mgt 5,602,930.95 C. Correspondence 1. Securities Email correspondence and letter to Morgan Stanley dated September 14, 2017 regarding the rebalancing of the portfolio for the next tranche of passive index strategies and to allocate to the new additional managers for Harding Loevner International & Lazard Asset Management Emerging Markets. 2. Email correspondence and letter to Comerica Bank dated September 18, 2017 regarding the depositing of the Tesco PLC securities litigation recovery check in the amount of $786.20. 3. Fee and Revenue Year-End Report June 30, 2017 received from Morgan Stanley dated September 19, 2017. 4. Confirmation of Account Change dated September 19, 2017 received from Morgan Stanley regarding passive index strategy. 5. Email correspondence and letter to Morgan Stanley dated September 21, 2017 regarding the transfer of funds for the payment of benefits. 6. Fee Information received from Morgan Stanley dated September 22, 2017. 7. New Account Confirmation received from Morgan Stanley dated September 23, 2017 regarding updated signers list. 8. Email correspondence and letter to Comerica Bank dated September 18, 2017 regarding the depositing of the JP Morgan Chase securities litigation recovery check in the amount of $1,175.34. 9. Email correspondence and letter to Morgan Stanley dated September 27, 2017 regarding the close out of securities litigation holdings Caterpillar and Simon Properties. 10. Wire transfer notification received from Morgan Stanley dated September 27, 2017 regarding the transfer of funds for the payment of benefits. 11. Confirmation email with Comerica Bank dated October 9, 2017 regarding no pending stops under Option C. 12. “Pension & Investments” magazines dated September 18 & October 2, 2017. 3 REGULAR AGENDA: II. OLD BUSINESS: A. Service Retirement Information for Denice Gerstenberg, City Development Director, Office of Economic Development Motion by Varney, supported by Marah, to approve the service retirement for Denice Gerstenberg, City Development Director, Office of Economic Development, effective September 21, 2017 with service credit of 26 years, two months and the monthly pension amount of $7,028.90, under option B 50% pop-up without annuity withdrawal based on a monthly final average compensation of $12,263.33. Ayes: All. Motion carried unanimously. B. Service Retirement Information for Roxanne Reeder, Appraiser III, Office of Assessing Motion by Varney, supported by Henig, to approve the service retirement for Roxanne Reeder, Appraiser III, Office of Assessing effective September 15, 2017 with service credit of 21 years, eleven months and the monthly pension amount of $3,054.14 under option C 10 year with annuity withdrawal based on a monthly final average compensation of $7,170.35. Ayes: All. Motion carried unanimously. III. NEW BUSINESS: A. Application for Service Retirement for Jennifer Maillousx, Management Assistant, Office of City Clerk Motion by Marsh, supported by Henig, to receive and file the application for service retirement for Jennifer Mailloux, Management Assistant, Office of City Clerk. Ayes: All. Motion carried unanimously. B. Pension Administration Comments – Update of Annual Retiree / Beneficiary Verification Hessell stated that compliance as of the meeting date was at 97% which was on par with results from prior years and that 17 second verification requests were mailed out on October 16th, 2017 1. Draft Agenda November 29, 2017 Special Meeting 4  Motion by Marsh, supported by Henig, to approve Agenda for the November 29, 2017 special meeting as presented. C. Trustee Comments – None. ADJOURN: Motion by Henig, supported by Marsh to adjourn the meeting at 1:55 p.m. Ayes: All. Motion carried unanimously. Respectfully Submitted, ___________________________________ Jennifer Varney, Secretary 5