Police & Fire Retirement Board

REGULAR MEETING MINUTES OF THE STERLING HEIGHTS POLICE AND FIRE RETIREMENT SYSTEM, ACT 345 JANUARY 19, 2012 FIRE DEPARTMENT CONFERENCE ROOM 41625 RYAN ROAD STERLING HEIGHTS, MI 48313 1. The regular meeting of the Police and Fire Retirement System was called to order by Chairman Padovini at 4:08 p.m. 2. Board Members present: Solak (arrived at 4:35 p.m.), Wellhausen, Padovini, Nash, Varney. Also present: Tim Brice, representing Merrill Lynch Private Client Group; Tom Michaud, Legal Counsel; and Nancy Duyck, Pension Technician. 3. APPROVAL OF CONSENT AND REGULAR AGENDAS Motion by Varney, supported by Wellhausen, to approve the consent agenda as presented. Ayes: Varney, Wellhausen, Padovini, Nash. Absent: Solak. The motion carried. Motion by Nash, supported by Wellhausen, to approve the regular agenda as presented. Ayes: Nash, Wellhausen, Padovini, Varney. Absent: Solak. The motion carried. 4. APPROVAL OF MINUTES No corrections were made to the draft minutes of the regular meeting of December 15, 2011. Motion by Varney, supported by Padovini, to approve the minutes as presented. Ayes: Varney, Padovini, Wellhausen. Abstain: Nash. Absent: Solak. The motion carried; the minutes of the regular meeting of December 15, 2011 are hereby approved. 5. CITIZEN PARTICIPATION There was no Citizen participation 6. REPORT FROM LEGAL COUNSEL No formal legal report was presented. Mr. Michaud commented on items of old business as they were considered. CONSENT AGENDA 7. CORRESPONDENCE a. Correspondence from Intercontinental dated December 12, 2011 re: US REIF distribution. b. Correspondence to Rodwan Consulting Company dated January 10, 2012 re: actuarial information for December 31, 2011 report. c. Other correspondence received from: 1. Bernstein Litowitz Berger & Grossmann LLP 2. Janus Capital Group investment solutions newsletter 3. Merrill Lynch – market value updates 4. NCPERS 5. Orleans Capital Management 6. Pomerantz Haudek Grossman & Gross LLP 7. Robbins Geller Rudman & Dowd LLP d. Magazines received: 1. Pensions & Investments for December 26, 2011 and January 9, 2012. 2. Institutional Investor for January 2012 3. Plan Sponsor for January 212 CONSENT AGENDA – cont. 8. BILLS AND EXPENDITURES b. Disbursements to retirees/members other than monthly benefit payments There were no disbursements to retirees/members other than monthly benefit payments this month. c. Checking Account Summary Beginning Balance $7,321.67 12/01/11 Subtractions (5) $2,081.99 1. 12/23 Check 1867 100.00 MAPERS – 2012 dues 2. 12/20 Check 1868 33.69 Office Depot order 3. 12/09 Check 5189 937.36 Contract Payment Nancy Duyck 4. 11/10 Check 5190 73.58 Contract fee – Gurin & Gurin 5. 11/25 Check 5191 937.36 Contract Payment Nancy Duyck Electronic withdrawals (4) $1,268.70 1. 12/12 106.94 Michigan St. tax w/h 2. 12/13 461.54 IRA contribution 3. 12/14 350.11 IRS Fed. tax w/h 4. 12/28 350.11 IRS Fed. tax w/h Ending Balance $3,970.98 12/31/11 d. Transmittal of Checks There were no checks transmitted this month. 9. FUNDS MANAGEMENT a. The current value of funds as of December 30, 2011 is detailed below: Clearing account $ 1,431,140.71 Intercontinental $ 7,720,821.84 McDonnell $ 15,924,808.05 Pimco $ 15,515,555.23 Wamco $ 15,567,605.24 MD Sass $ 17,366,908.36 Horizon $ 16,404,329.53 Earnest Partners $ 9,360,789.06 NFJ/Allianz $ 12,730,578.11 AIM/Invesco $ 12,670,860.19 CONSENT AGENDA 9. FUNDS MANAGEMENT a. The current value of funds as of December 30, 2011 is detailed below: cont. Janus $ 17,264,567.88 Atalanta $ 17,244,913.37 Checking account $ 3,970.98 TOTAL FUNDS $ 159,206,848.55 b. The Board received a copy of the Summary of Employer Contributions to the Police and Fire Retirement System for the 2011 tax year as of 12/15/11. The System has received $7,077,163.96 of the 2011/12 budget of $7,368,876.00, leaving a $291,712.04 balance. c. A Securities Loan Statement Recap sheet as of 11/30/11 is enclosed showing the amounts received each month in the Securities Loan Program. Our earnings for the 2011/12 fiscal year through 11/30/11 are $ 995.35. d. Benefit Register Listing as of January 1, 2012 from Comerica Bank showing 282 retirees/beneficiaries with a payout for January of $ 1,142,502.06 and a year-to-date of $ 1,142,502.06. e. The current Merrill Lynch Bond index for December 2011 is 2.03%. 10. BENEFITS & PLAN ADMINISTRATION a. Old Business 1. Abel/Noser Reports for November 2011 Abel/Noser has supplied the November 2011 report. REGULAR AGENDA 8. BILLS AND EXPENDITURES a. Disbursements other than retiree benefit payments (bills) 1. Disbursement to Rodwan Consulting Company in the amount of $2,700.00 for actuarial and consulting services rendered for the quarter ended 12/31/11. 2. Disbursement to Merrill Lynch in the amount of $22,756.65 for quarterly UMA fee for the NFJ/Allianz account for the quarter ended 3/31/12. 3. Disbursement to Merrill Lynch in the amount of $27,740.73 for quarterly UMA fee for the Atalanta account for the quarter ended 3/31/12. REGULAR AGENDA 8. BILLS AND EXPENDITURES a. Disbursements other than retiree benefit payments (bills) – cont. 4. Disbursement to Merrill Lynch in the amount of $16,132.97 for quarterly UMA fee for the Earnest Partners account for the quarter ended 3/31/12. 5. Disbursement to Merrill Lynch in the amount of $25,958.69 for quarterly UMA fee for the Pimco account for the quarter ended 3/31/12. 6. Disbursement to Merrill Lynch in the amount of $26,063.17 for quarterly UMA fee for the WAMCO account for the quarter ended 3/31/12. 7. Disbursement to MD Sass in the amount of $20,342.15 for investment management fees for quarter ended 12/31/11. 8. Disbursement to the City of Sterling Heights in the total amount of $1,988.00 for accounting services rendered for the quarter ended 12/31/11 and the Rotter EDRO. 9. Disbursement to VanOverbeke, Michaud & Timmony, PC in the total amount of $11,380.05 for legal services rendered for the periods of 1/1/11 through 12/31/11. Motion by Varney, supported by Wellhausen, to approve the bills as presented. Ayes: Varney, Wellhausen, Padovini, Nash. Absent: Solak. The motion carried. Ken Solak arrived at 4:35 p.m. 9. FUNDS MANAGEMENT f. Merrill Lynch – large cap equity – discussion Tim Brice was in attendance to discuss large cap equity with the Board. He presented three handouts to the Board. He also stated that Atalanta made progress and was doing better, but still on fragile ground. The Board will continue to get monthly updates from Atalanta. No action was taken at this time. REGULAR AGENDA 10. BENEFITS & PLAN ADMINISTRATION a. Old Business 2. February regular/quarterly meeting – discussion The Board discussed the February regular/quarterly meeting on February 16, 2012 and the start time. Merrill Lynch will be attending. Motion by Wellhausen, supported by Padovini, to change the start time for all meetings through June 30, 2012 from 5:00 p.m. to 4:00 p.m. Ayes: All. The motion carried. 3. David Strasz – duty disability retirement resolution – discussion  Police Officer David Strasz applied for duty disability retirement from the Police Department effective December 7, 2011. All required paperwork is on file in the Pension Office. The following duty disability retirement resolution was considered: R 12-1-19-1 WHEREAS, the City of Sterling Heights Police and Fire Retirement System (“Retirement System”) is governed in accordance with the provisions of Public Act 345, as amended (“Act 345”), applicable collective bargaining agreements, and applicable state and federal laws, and WHEREAS, the Board of Trustees is vested with the authority and fiduciary responsibility for the proper administration, management and operation of the Retirement System, and WHEREAS, the Board, at its meeting held September 15, 2011, acknowledged receipt of OFFICER DAVID STRASZ’s application for duty disability retirement, and resolved to process said application in accordance with the provisions of Act 345 and its disability retirement procedures, and WHEREAS, the Board is in receipt of the Medical Committee’s reports and certifications finding that OFFICER DAVID STRASZ is (1) physically incapacitated for the further performance of duty as a Police Officer in the service of the City, (2) that the incapacity is likely to be permanent, and (3) that Mr. Strasz should be retired, and REGULAR AGENDA 10. BENEFITS & PLAN ADMINISTRATION a. Old Business 3. David Strasz – duty disability retirement resolution – discussion – cont. WHEREAS, the Board has reviewed and discussed all the evidence presented, and WHEREAS, the Board of Trustees has found the disability to be the result of a personal injury or disease occurring as the natural and proximate result of causes arising out of and in the course of the member’s employment by the City, and WHEREAS, the Trustees have provided all the necessary personal and financial data to the Board’s Actuary as it relates to OFFICER DAVID STRASZ, a single man, and the necessary reports have been reviewed and completed by the Actuary, which includes documentation re: date of birth, and social security number, and WHEREAS, OFFICER DAVID STRASZ has reviewed this data and has elected to receive his duty disability retirement benefit in the form of a regular retirement, and WHEREAS, the forenamed member has requested an annuity withdrawal (total lump sum distribution from the defined contribution plan) under the provisions of the Retirement System and collective bargaining agreement, and WHEREAS, the Police and Fire Retirement Board is now in receipt of the necessary final average compensation amount. The Board of Trustees on receipt of this data forwarded it to the Board Actuaries for the updated retirement data. The actuaries have indicated to the Board, in writing, the retirement benefits due OFFICER DAVID STRASZ, as a result of this data, therefore be it RESOLVED, that OFFICER DAVID STRASZ after having been credited with 12 years, 2 months and 10 days of service credit, is hereby granted a duty disability retirement in accordance with Act 345, as amended, effective December 7, 2011, and further RESOLVED, that OFFICER DAVID STRASZ‘s request for annuity withdrawal, authorizing a payment representing the total amount of his contribution plus interest to the date of his duty disability retirement, be granted, and further REGULAR AGENDA 10. BENEFITS & PLAN ADMINISTRATION a. Old Business 3. David Strasz – duty disability retirement resolution – discussion – cont. RESOLVED, that OFFICER DAVID STRASZ shall be paid an annuity withdrawal (total lump sum distribution from the defined contribution plan) of $49,457.71 and a yearly regular retirement pay in the amount of $27,240.24 or monthly benefits of $2,270.02. That the Treasurer shall immediately calculate and pay OFFICER DAVID STRASZ the appropriate amount effective from the first date of his retirement, December 7, 2011, and further RESOLVED, that a copy of this resolution be provided to Mr. Strasz and all other appropriate parties. Motion by Solak, supported by Wellhausen, to adopt the resolution as presented. Ayes: All. The motion carried; the resolution is hereby adopted. 4. Donald Sypniewski – partial DROP distribution – discussion Retired Sergeant Donald Sypniewski of the Police Department terminated his DROP retirement as of November 30, 2010. He requested a partial DROP distribution from his DROP account. Motion by Solak, supported by Wellhausen, to approve the partial DROP distribution as presented. Ayes: All. The motion carried. 5. Frank Mowinski – partial DROP distribution – discussion Retired Captain Frank Mowinski of the Police Department terminated his DROP retirement as of January 2, 2009. He requested a partial DROP distribution from his DROP account. Motion by Solak, supported by Wellhausen, to approve the partial DROP distribution as presented. REGULAR AGENDA 10. BENEFITS & PLAN ADMINISTRATION a. Old Business 5. Frank Mowinski – partial DROP distribution – discussion – cont. Ayes: All. The motion carried. 6. Don Mankiewicz – partial DROP distribution – discussion Retired Fire Marshal Don Mankiewicz of the Fire Department terminated his DROP retirement as of February 29, 2008. He requested a partial DROP distribution from his DROP account. Motion by Wellhausen, supported by Solak, to approve the partial DROP distribution as presented. Ayes: All. The motion carried. 7. Proposed 2012/13 budget - discussion The Secretary reviewed a mid-year spreadsheet for actual expenditures with percentages of budget spent. He also reviewed recommendations for the 2012/13 budget. During discussion, the following budget center amounts were considered: 2012/13 PROPOSED BUDGET  ITEM BUDGET 2011/12 PROPOSED 2012/13 SUPPLIES 729.000 Postage 500 500 (No change) 730.000 Publications 350 350 (No change) 751.000 Operating Supplies 300 300 (No change) 758.000 Computer Software 0 0 (No change) Total Supplies 1,150 1,150 (No change) REGULAR AGENDA 10. BENEFITS & PLAN ADMINISTRATION a. Old Business 7. Proposed 2012/13 budget – discussion – cont. OTHER CHARGES 802.000 Audit/accounting 19,200 31,800 (65.63% change) 806.000 Legal Services 12,000 12,000 (No change) 807.000 Medical Services 1,000 1,000 (No change) 826.000 Other Contracted 1,030,500 1,030,500 (No change) 903.000 Printing 350 250 (-28.57% change) 922.000 Telephone 400 710 (77.5% change) 956.000 Local Meetings 0 0 (No change) 957.000 Memberships 200 325 (62.5% change) 959.000 Education/Training 5,650 5,650 (No change) 1,069,300 1,082,235 (1.21% change) TOTAL ACTIVITY 1,070,450 1,083,385 (1.21% change) CAPITAL EQUIPMENT 979.000 Computer Equipment 0 0 (No change) Motion by Solak, supported by Nash, to approve the 2012/13 budget as presented. Ayes: All. The motion carried. 11. Trustee Comments – Mr. Wellhausen reported to the Board that he has successfully completed the Basic Fiduciary Examination of the MAPERS Achievement Program. 12. ADJOURNMENT Motion by Padovini, supported by Wellhausen, to adjourn at 5:00 p.m. Ayes: All. The motion carried; the meeting is hereby adjourned. Mark Wellhausen Secretary