General Employees Retirement Board

OFFICIAL MINUTES OF REGULAR MEETING OF THE STERLING HEIGHTS GENERAL EMPLOYEE’S RETIREMENT SYSTEM Thursday, December 21, 2017 ___________________________________________________________________ __ _ ___ Location: Room #201 40555 Utica Road, Sterling Heights, MI 48313 (586) 446-2331 Chairperson Weiler called the meeting to order at 1:35 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.; City Controller Nick Makie 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 October 19, 2017 and the special meeting of November 29, 2017. Ayes: All. Motion carried unanimously. COMMUNICATION FROM CITIZENS: None REPORT FROM LEGAL COUNSEL – Legislative Update Michaud provided an update on House Bill No. 5298 and Senate Bill No. 686 which were signed into law on December 20, 2017. The legislation was known as the “Protecting Local Government Retirement and Benefits Act”. The legislation was separated into three categories (1) mandated changes (2) required reporting transparency and (3) underfunded local units. Earlier in 2017, a task force was appointed by the Governor and the legislation followed the recommendations made in the July 2017 task force report. Under mandated changes, local units of government would have more actuarial analysis conducted, a summary annual report requirement under reporting transparency and an over sight committee to assist underfunded local units. Michaud requested that the Board recess to closed session to discuss litigation. Motion by Marsh, supported by Weiler, to recess to closed session for the purposes of discussing litigation. 1 Roll call vote: Weiler: Aye Varney: Aye Jaganjac: Aye Marsh: Aye Henig: Aye Board recessed to closed session. Separate minutes of the closed session were compiled. Board reconvened from closed session. Michaud also commented on items as they appeared on the agenda. CONSENT AGENDA: Motion by Henig, supported by Marsh, to receive and file consent items I A through I D-2. Ayes: All. Motion carried unanimously. I. RECEIVE AND FILE: A. Benefit register listing for December 1, 2017 from Comerica Bank showing 361 active retirees with a payout for November 2017 of $900,721.87 and a year-to-date payout of $10,859,165.88. B. Cash and Asset Statements as of November 30, 2017 from Comerica Bank and Morgan Stanley showing a total market value of $113,087,215.94 comprised as follows: Desired Allocation Asset Class / Percentage 0% Cash 0.53% Comerica Bank $ 598,195.19 12% Fixed Income 11.67% Boyd Watterson 13,269,112.19 12% Fixed Income 11.98% WAMCO 13,617,824.73 11% Small Cap 14.51% Earnest Partners 16,492,196.81 4% Large Cap Value 3.69% Confluence 4,195,233.87 4% Large Cap Value 3.72% MFS 4,230,390.61 3% Large Cap Value 2.98% iShares Val Index 3,386,031.66 4% Large Cap Growth 3.11% AMI 3,530,583.72 2% Large Cap Growth 2.00% Winslow 2,274,148.16 3% Large Cap Growth 2.74% Janus Capital 3,117,600.71 2% Large Cap Growth 2.09% iShares Gr Index 2,370,892.59 6% Large Cap Core 6.32% London 7,189,859.48 4% Large Cap Core 4.04% iShares S&P Index 4,591,041.78 10% Large Cap Global 8.94% INVESCO 10,166,293.73 10% Large Cap Global 9.14% Cambiar 10,391,456.44 3% Large Cap Global 3.04% Harding 3,460,007.97 3% Emerging Markets 2.53% Lazard / HLMEX 2,881,546.04 2% REITS 2.27% Principal REIT 2,578,274.02 5% MLP’s 4.70% Cushing Asset Mgt 5,344,721.43 C. Correspondence 2  1. Various securities litigation settlement reports dated September 27, October 27, November 24, 2017 and Q3 2017. 2. Email correspondence and letter sent to Morgan Stanley and Comerica Bank dated October 19, 2017 regarding the transfer of funds for the payment of benefits. 3. Letter sent to Comerica Bank dated October 23, 2017 regarding deposit of check in the amount of $34.05 for the CVS Caremark securities litigation settlement. 4. Wire transfer confirmation from Morgan Stanley dated October 25, 2017 5. Email correspondence to GERS Board dated November 8, 2017 regarding cancellation of November regular Board meeting. 6. Email correspondence and letters sent to Morgan Stanley dated November 13, 2017 regarding the authorization for the payment of money manager fees. 7. Wire transfer confirmation received from Morgan Stanley dated November 13, 2017 for the payment of money manager fees. 8. Email correspondence and letter sent to Morgan Stanley and Comerica Bank dated November 13, 2017 regarding the transfer of funds for the payment of benefits. 9. Wire transfer notification received from Morgan Stanley dated November 21, 2017 confirming the transfer of funds for the payment of benefits. 10. Fee information summary received from Morgan Stanley dated November 21, 2017. 11. Letter sent to Comerica Bank dated December 7, 2017 regarding deposit of check in the amount of $509.62 for the Tesco PLC securities litigation settlement. 12. “Pension & Investments” magazines dated October 16th & 30th, November 13th & 27th and December 11th, 2017. D. Approve Invoices for Payment 1. Payable from System Assets for the service period ending September 30, 2017. Quarterly management fees from Morgan Stanley in the amount of $157,701.41 and from Boyd Watterson in the amount of $4,974.00. 2. Payable from City Assets for the service periods ending through December 2017. Bank custodian fees from Comerica Bank in the amount of $4,857.10, Section 415 limit calculation actuarial fees from Gabriel Roeder Smith & Co in the amount of $2,400.00 and MAPERS 2018 membership renewal invoice in the amount of $100.00. REGULAR AGENDA: II. NEW BUSINESS: A. Suspension of Retiree Benefits Motion by Henig, supported by Varney to approve the suspension of benefits for the three following retirees who have not responded to the two retiree verification forms that were mailed to them: Audrey Hammond Lois Gates Phyllis Puskar 3  Ayes: All. Motion carried unanimously. B. Change in Retiree Status- David Padmos (Deceased) Motion by Varney, supported by Marsh, to approve the termination of straight life benefits for retiree, David Padmos, due to his death on November 28, 2017. Ayes: All. Motion carried unanimously. C. Application for Service Retirement, Paul Geiger (subject to EDRO), Code Enforcement Coordinator, Office of City Development Motion by Varney, supported by Marsh, to receive and file the application for service retirement, Paul Geiger (subject to EDRO), Code Enforcement Coordinator, Office of City Development Ayes: All. Motion carried unanimously. D. Application for Service Retirement, Karen Kazmer, Community Relations Specialist, Office of Community Relations Motion by Varney, supported by Marsh, to receive and file the application for service retirement for Karen Kazmer, Community Relations Specialist, Office of Community Relations. Ayes: All. Motion carried unanimously. E. Application for Non-duty Disability Retirement, David Reid, Facilities Maintenance Mechanic, Office of Building Services Motion by Henig, supported by Marsh, to approve the resolution and the application for non-duty disability retirement for David Reid, Facilities Maintenance Mechanic, Office of Building Services. Ayes: All. Motion carried unanimously. F. Pension Administrator Comments – None G. Trustee Comments – None. ADJOURN: Motion by Varney, supported by Weiler, to adjourn the meeting at 2:37 p.m. Ayes: All. Motion carried unanimously. Respectfully Submitted, ___________________________________ Jennifer Varney, Secretary 4