General Employees Retirement Board

OFFICIAL MINUTES OF REGULAR MEETING OF THE STERLING HEIGHTS GENERAL EMPLOYEE’S RETIREMENT SYSTEM August 14, 2019 Location: Room #202 40555 Utica Road, Sterling Heights, MI 48313 (586) 446-2783 Chairperson Weiler called the meeting to order at 1:33 p.m. BOARD MEMBERS PRESENT: Richard Weiler, Chairperson Todd Marsh, Trustee Paul Henig, Trustee Jennifer Varney, Secretary Mary Jaganjac, Treasurer BOARD MEMBERS ABSENT: None ALSO PRESENT: Tom Michaud, Legal Counsel Tim Brice, Morgan Stanley, The Brice Group 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 Marsh, supported by Henig, to approve the minutes of the following: - Regular Meeting of June 20, 2019 Ayes: All. Motion carried unanimously. COMMUNICATION FROM CITIZENS: None REPORT FROM LEGAL COUNSEL Michaud reported out on the following items: Lang case with brief board discussion and a motion from the court is expected in the fall P:\Ryan\PENSION\GERS MEETING FILES\Minutes\2019 Fiscal\19.6.20 1 unapproved minutes.docx CONSENT AGENDA: Items I.A through I.D2 Motion by Jaganjac, supported by Marsh, to approve consent agenda items I.A through I.D2 Ayes: All. Motion carried unanimously. I. RECEIVE AND FILE: A. Benefit Register Listing for July and August 1, 2019 from Comerica Bank showing 363 active retirees with a payout for the benefit months of $933,135.89 and $932,454.91, respectively, and a year-to-date of $7,460,739. B. Cash and Asset Statements as of July 31, 2019 from Comerica Bank and Morgan Stanley showing a total market value outlined below: Desired Percentage Asset Class Manager / Fund $ Balance Allocation 2.00% 2.81% LARGE CAP GROWTH CLEARBRIDGE $ 3,057,786.91 2.00% 3.00% LARGE CAP GROWTH ISHARES RUSSELL 1000 GROWTH ETF $ 3,267,637.12 3.00% 2.59% LARGE CAP GROWTH JANUS CAPITAL $ 2,825,580.11 4.00% 4.06% LARGE CAP VALUE CONFLUENCE $ 4,423,235.01 3.00% 3.58% LARGE CAP VALUE ISHARES RUSSELL 1000 VALUE ETF $ 3,901,455.74 4.00% 3.80% LARGE CAP VALUE MFS $ 4,134,534.80 6.00% 4.56% LARGE CAP CORE JOHN HANCOCK $ 4,969,803.70 4.00% 4.17% LARGE CAP CORE ISHARES S&P 500 ETF $ 4,547,108.25 4.00% 4.13% SMID CAP VALUE EDGE $ 4,496,464.18 11.00% 7.43% SMID CORE EARNEST PARTNERS $ 8,097,393.37 11.00% 9.99% INTERNATIONAL CAMBIAR $ 10,882,071.77 6.00% 7.86% INTERNATIONAL WCM $ 8,557,460.08 6.00% 6.01% INTERNATIONAL HARDING LOEVNER $ 6,549,088.33 1.50% 1.96% EMERGING HARDING LOEVNER HLEMX $ 2,129,789.08 1.50% 1.19% EMERGING LAZARD $ 1,293,835.31 2.00% 2.67% REITS PRINCIPAL $ 2,904,049.63 12.00% 11.95% FIXED INCOME WESTERN ASSET MANAGEMENT $ 13,013,980.59 12.00% 11.51% FIXED INCOME BOYD WATTERSON $ 12,536,498.23 5.00% 4.95% MLPS CUSHING $ 5,392,538.90 0.00% 1.80% CASH CASH $ 1,958,663.36 100.00% 100.00% $ 108,938,974 P:\Ryan\PENSION\GERS MEETING FILES\Minutes\2019 Fiscal\19.6.20 2 unapproved minutes.docx  C. Communication items listed below: Item Date Communication 1 May 31, 2019 RGR&D | Shareholder Class Actions 2 Jun 18, 2019 MS | Trade confirm 3 Jun 19, 2019 MS | Wire xfer confirm 4 Jun 29, 2019 MS | Consolidated Trade confirm 5 Jul 03, 2019 MS | Western Asset Prospectus 6 Jul 10, 2019 MS | US Gov't Money Mkt Prospectus - multiple accts 7 Jul 11, 2019 MS | Confirm of Pers. Acct. Info. 8 Jul 12, 2019 MS | US Gov't Money Mkt Prospectus - multiple accts 9 Jul 13, 2019 MS | US Gov't Money Mkt Prospectus - multiple accts 10 Jul 16, 2019 MS | Trade confirm 11 Jul 16, 2019 MS | Acct Change confirm 333-XXX761 ** 12 Jul 18, 2019 GRS | Subpoena 13 Jul 19, 2019 MS | Retirement Plan Fee Changes 14 Jul 23, 2019 MS | Trade confirm 15 Jul 23, 2019 MS | Wire xfer confirm MS | Updated ADV Brochure for Investment Advisory 16 Jul 26, 2019 Accounts 17 Jul 26, 2019 RGR&D | Shareholder Class Actions 18 Jul 30, 2019 MS | trade confirm 19 Jul 30, 2019 BWAM | Statement of Accounts 20 Aug 01, 2019 MS | Consolidated Trade confirm D. Approval items i. Payable from City Assets for the service period ending June 30, 2019:  Q1 Comerica Bank fees Q1: $4,912.15  GRS Benefit calculation fees: $630 ii. Payable from Fund Assets for the service period ending June 30, 2019: $166,360.45 total  Q1 Boyd Watterson management fees: $4,711  Q1 WCM management fees: $18,504.21  Q1 Morgan Stanley consolidated management fees: $149,475.81 P:\Ryan\PENSION\GERS MEETING FILES\Minutes\2019 Fiscal\19.6.20 3 unapproved minutes.docx REGULAR AGENDA II. OLD BUSINESS A. Service Retirement – Keri Marshall, Treasury Accountant Motion by Marsh, supported by Henig, to approve Keri Marshall receive Option A – 100% Pop-Up benefits with Annuity Withdraw at a monthly benefit of $2,715.92 with a one-time annuity withdraw amount of $89,899.64. Ayes: All. Motion carried unanimously. III. NEW BUSINESS A. Retroactive Service Retirement Pop-Up Adjustment – Patricia Hassar, MAPE Clerical Motion by Henig, supported by Marsh, to approve retroactive adjustment for Patricia Hassar, Option A 100% w/ Pop-Up with Annuity Withdraw from 2/25/2016 going forward; benefit was adjusted from original amount at $1,492.21 to Option A w/ Pop-Up without Annuity Withdraw at $1,692.35 instead of being adjusted to Straight Life to w/ Annuity Withdraw at $1,718.66. Total retroactive calculation outlined here: Opt A w/ P-U w/out a/w SL w/ a/w Var Monthly Benefit 1,692.35 1,718.66 26.31 Year Months Variance Prorata 2/2016 - 3.76 2016 9 236.79 2017 12 315.72 2018 12 315.72 2019 8 210.48 Total Due 1,078.71 Ayes: All. Motion carried unanimously. B. Pension Administration Comments 1. Review of Proposed 2018/2019 GERS Meeting Schedule 2. Annual Update & Review of RFP Status – Service Providers Motion by Marsh, supported by Henig, to receive and file GERS Meeting Schedule consider and decide to maintain current legal counsel Ayes: All. Motion carried unanimously. C. Morgan Stanley – The Brice Group, Quarterly Review & Interviews P:\Ryan\PENSION\GERS MEETING FILES\Minutes\2019 Fiscal\19.6.20 4 unapproved minutes.docx  1. 1:45pm - Interview Victory Capital Management 2. 2:00pm - Interview Fidelity Institutional Asset Management After interviewing and discussing the merits of both Victory Capital and Fidelity Institutional Asset Management, any decision to move into Small Cap International funds was shelved leaving the option to revisit this asset class in the future. The board then studied the quarterly Morgan Stanley Graystone Consulting Investment Performance Analysis and considered the performance of all current money managers. Cambiar was cited as a trending underperformer with Aristotle as a parallel manager in the international space with better overall performance and lower fees. Motion by Henig, supported by Varney, to move from Cambiar to Aristotle due to lower fees and better performance. Ayes: All. Motion carried unanimously. D. Trustee Comments: None ADJOURN Motion by Henig, supported by Varney, to adjourn meeting. Ayes: All. Motion carried unanimously. P:\Ryan\PENSION\GERS MEETING FILES\Minutes\2019 Fiscal\19.6.20 5 unapproved minutes.docx