General Employees Retirement Board

OFFICIAL MINUTES OF REGULAR MEETING OF THE STERLING HEIGHTS GENERAL EMPLOYEE’S RETIREMENT SYSTEM Thursday September 20, 2018 Location: Room #201 40555 Utica Road, Sterling Heights, MI 48313 (586) 446-2783 Chairperson Weiler called the meeting to order at 1:30 p.m. BOARD MEMBERS PRESENT: Richard Weiler, Chairperson Jennifer Varney, Secretary Todd Marsh, Trustee Paul Henig, Trustee Mary Jaganjac, Treasurer BOARD MEMBERS ABSENT: ALSO PRESENT: Tom Michaud, Legal Counsel Francois Pieterse, GRS Stephanie Crawford, GRS Ryan Clark, Treasury Service Coordinator APPROVAL OF AGENDA: Motion by Henig, supported by Marsh, 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 August 16, 2018. Ayes: All. Motion carried unanimously. COMMUNICATION FROM CITIZENS: None REPORT FROM LEGAL COUNSEL CONSENT AGENDA: Motion by Henig, supported by Marsh, to receive and file consent items I A through I C-1. Ayes: All. Motion carried unanimously. RECEIVE AND FILE: A. Benefit Register Listing for September 1, 2018 from Comerica Bank B. Cash and Assets Statement as of August 31, 2018 from Comerica Bank and Morgan Stanley C. Correspondence: 1 REGULAR AGENDA: II. OLD BUSINESS: None III. NEW BUSINESS: A. Change in Retiree Status - Mary Lou Simmons (deceased) Motion by Henig, supported by Jaganjac, to approve termination of straight life benefits in the gross amount of $1,665.62 for retiree, Mary Lou Simmons, due to her death on Augst 9, 2018. B. Change in Retiree Status - Rosemary Lane (deceased) Motion by Henig, supported by Jaganjac, to approve termination of Option A benefits w/ pop-up in the gross amount of $1,169.33 for retiree, Rosemary Lane, due to her death on Augst 18, 2018. C. Change in Retiree Status - Burt Lambert (survivor/retiree) Motion by Marsh, supported by Henig, to approve Burt Lambert (survivor/retiree) to receive Option A benefits equal to 100% that of the deceased retiree Mary Lambert in the monthly gross amount of $1,407.13 for the benefit payment beginning October 1, 2018. D. Review Annual Valuation and GASB No. 67 and No. 68 with actuarial consultant JUNE 30, 2018 49TH ANNUAL ACTUARIAL VALUATION REPORT– GABRIEL, ROEDER, SMITH & CO. Francois Pieterse and Stephanie Crawford presented the actuarial valuation for the retirement system to the Board and reviewed the funding status of the closed plan. The funding ratio of the plan is 78.6%. Changes from revised actuarial assumptions and methods as recommended in the five year actuarial experience study resulted in an overall increase to the UAAL of $1,641,052. The introduction of updated morality tables, increase in retirees and fewer active members were the primary reasons for the increase in liability. Pieterse commented that the current 7.50% rate was at the upper end of the range for reasonable assumptions according to ASOP No. 27 and will have to be reviewed before the next valuation. Pieterse reported that the City required contribution for fiscal 2019/2020 would be $3,768,403. The annual UAAL amortization amount will continue to increase each year due to the closed fund declining amortization period. JUNE 30, 2018 GASB STATEMENTS NO. 67 & 68 ACCOUNTING AND FINANICAL REPORTING FOR PENSIONS– GABRIEL, ROEDER, SMITH & CO Pieterse and Crawford reviewed the GASB No. 67 & 68 report with the Board and described the differences between the numbers reported for the funding valuation report and those figures that were incorporated into the GASB report. The most common denominator was that the market value assets in the valuation report agreed to the plan fiduciary net position – ending as presented in the GASB report in the amount of $110,323,663. The net pension liability for the GERS system that would be recorded as a liability amounted to $32,337,938. Because of the declining 2  amortization of the UAAL in the funding valuation, the full 7.50% rate of return can be utilized in the GASB report. Pieterse noted a new statewide requirement coming through in PA 202 amendment requiring a third report that conforms to a state-issued rate of return that will be required if the amendment materializes. GRS and Michaud will be in communication with the board on the status of this new requirement. The Board thanked Mr. Pieterse and Ms. Crawford for the Valuation and GASB reports. Motion by Varney, supported by Weiler, to receive and file the Annual Actuarial Valuation and GASB No. 67 and No. 68 Accounting and Financial Reporting for Pensions reports, dated June 30, 2018 and further that copies be forwarded to the employer – City, that the Board hereby certifies to the employer – City, the employer contribution required for the fiscal year beginning July 1, 2018 (as reflected by the June 30, 2017 Actuarial Valuation) in the amount of $4,240,062, consisting of the $3,768,403 City contribution and the $471,659 general employee contribution, and further that the recommended transfer in the amount of $1,514,186 to the Reserve for Retired Benefit Payments from the Reserve for Employer Contributions be made. Ayes: All. Motion carried unanimously. E. Pension Administration Comments Notated in Board Resolution 99-02, moving the quarterly money manager reviews to the Third Thursday of the second month following the end of the quarter complies with Board policy. F. Trustee Comments ADJOURN: Motion by Marsh, supported by Henig, to adjourn the meeting at 2:12 p.m. Ayes: All. Motion carried unanimously. Respectfully Submitted, ___________________________________ Jennifer Varney, Secretary 3