Police & Fire Retirement Board

REGULAR MEETING MINUTES OF THE STERLING HEIGHTS POLICE AND FIRE RETIREMENT SYSTEM, ACT 345 FEBRUARY 16, 2012 FIRE DEPARTMENT CONFERENCE ROOM 41625 RYAN ROAD STERLING HEIGHTS, MI 48313 Secretary Wellhausen requested a moment of silence in honor of retired Fire Lieutenant Larry Furlow who passed away on February 4, 2012. 1. The regular meeting of the Police and Fire Retirement System was called to order by President Solak at 4:02 p.m. 2. Board Members present: Solak, Wellhausen, Padovini, Nash, Varney. Also present: John Solecki, James Davolos, and Steven Butler, representing Horizon Asset Management; 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 Padovini, supported by Wellhausen, to approve the consent agenda as presented. Ayes: All. The motion carried. The following items were added to the regular agenda: 10 a 7. Brandon Flynn – municipal buyback – 2 years - discussion 8. Joseph Toth – DROP resolution – discussion 9. Henry Yanez – DROP resolution – discussion 10. Joann Spence – EDR0 benefit - discussion 3. APPROVAL OF REGULAR AGENDA – cont. Motion by Nash, supported by Varney, to approve the regular agenda as amended. Ayes: All. The motion carried. 4. APPROVAL OF MINUTES No corrections were made to the draft minutes of the regular meeting January 19, 2012. Motion by Varney, supported by Padovini, to approve the minutes. Ayes: All. The motion carried; the minutes of the regular meeting of January 19, 2012 are hereby approved as presented. 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 to Merrill Lynch dated January 24, 2012 re: attendance at February meeting. b. Correspondence to Horizon dated January 27, 2012 re: attendance at February meeting. c. Other correspondence received from: 1. International Foundation 2. Lord Abbett & Co. 3. Merrill Lynch – market value updates 4. Michigan Venture Capital Association 5. NCPERS 6. Pomerantz Haudek Grossman & Gross LLP 7. Robbins Geller Rudman & Dowd LLP d. Magazines received: 1. Pensions & Investments for January 23, and February 6, 2012. 2. Institutional Investor for February 2012 3. Plan Sponsor for February 2012 CONSENT AGENDA - cont. 8. BILLS AND EXPENDITURES c. Checking Account Summary Beginning Balance $3,970.98 1/01/12 Additions (1) 1. 1/10 $5,000.00  Subtractions (6) $2,138.55 1. 1/04 Check 1869 59.12 AT & T phone bill – 12/16/11 2. 1/19 Check 1870 93.50 ND – postage reimbursement 3. 1/24 Check 1871 36.27 AT & T phone bill – 1/16/12 4. 1/06 Check 5192 938.04 Contract Payment Nancy Duyck 5. 1/20 Check 5193 938.04 Contract Payment Nancy Duyck 6. 1/20 Check 5194 73.58 Contract fee – Gurin & Gurin Electronic withdrawals (4) $1,267.34 1. 1/10 106.94 Michigan St. tax w/h 2. 1/06 461.54 IRA contribution 3. 1/06 349.43 IRS Fed. tax w/h 4. 1/20 349.43 IRS Fed. tax w/h Ending Balance $5,565.09 1/31/12 d. Transmittal of Checks 1. $400.00 received from Jimmy Fawaz for a deposit for an EDRO actuarial calculation. 9. FUNDS MANAGEMENT a. The current value of funds as of January 31, 2012 is detailed below: Clearing account $ 1,583,342.45 Intercontinental $ 7,720,874.33 McDonnell $ 16,086,544.47 Pimco $ 15,782,986.48 Wamco $ 15,789,521.57 MD Sass $ 18,210,094.76 Horizon $ 17,620,130.25 Earnest Partners $ 10,026,917.79 NFJ/Allianz $ 13,678,628.77 CONSENT AGENDA 9. FUNDS MANAGEMENT - cont. a. The current value of funds as of January 31, 2012 is detailed below: AIM/Invesco $ 13,263,017.09 Janus $ 18,639,606.75 Atalanta $ 18,125,901.09 Checking account $ 5,565.09 TOTAL FUNDS $ 166,533,130.89 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 1/17/12. The System has received $7,198,873.72 of the 2011/12 budget of $7,368,876.00, leaving a $170,002.28 balance. c. A Securities Loan Statement Recap sheet as of 12/31/11 is enclosed showing the amounts received each month in the Securities Loan Program. Our earnings for the 2011/12 fiscal year through 12/31/11 are $1,036.48. d. Benefit Register Listing as of February 1, 2012 from Comerica Bank showing 283 retirees/beneficiaries with a payout for February of $1,108,231.88 and a year-to-date of $2,250,733.94. e. The current Merrill Lynch Bond index for January 2012 is 1.87%. 10. BENEFITS & PLAN ADMINISTRATION a. Old Business 1. Abel/Noser Reports for December 2011 Abel/Noser has supplied the December 2011 report. 2. Kevin Wardrop – Application for DROP retirement Fire Captain Kevin Wardrop has submitted an application for DROP retirement effective March 20, 2012. All required paperwork is on file in the Pension Office. The following items were taken out of order of the published agenda. REGULAR AGENDA 9. FUNDS MANAGEMENT f. Quarterly Performance Report 1. Horizon Asset Managements John Solecki, James Davolos, and Steven Butler, represented Horizon at this meeting. They had forwarded a detailed report regarding funds under their management. They reviewed the report and also responded to individual Board member’s questions. Market value of the funds under management as of December 31, 2011 was $16,404,328. The total fund return for the fourth quarter was 6.8%, ranking in the 99th percentile, as summarized below: 9/11 12/10 12/08 Horizon to 12/11 to 12/11 to 12/11 Total Fund* 6.8/99 -10.0/97 14.7/23 *Ranked against the BofAML Domestic Large Cap Value Equity Sample – Total 2. Merrill Lynch Tim Brice reviewed the summary report of manager performance. Enclosed in this report was the Board’s summary of investment policies and objectives, fourth quarter 2011 AIM Market Focus report. Also included was an executive summary of the Composite, Allianz, Invesco, Atalanta, Janus, Earnest, Intercontinental, Horizon, MD Sass, McDonnell, Pimco, and Wamco reports. The following manager specific comments were discussed: McDonnell Investments a. The total portfolio return in the fourth quarter was 1.2%, ranking in the 52nd percentile of the BofAML Domestic Fixed Income Sample. It exceeded the Custom Index (1.1%), and the Barclays Capital Aggregate Bond Index (1.1%). b. Their total portfolio return was 6.6% since inception (12/31/08). This exceeded the Custom (6.4%), and trailed the Barclays Capital Aggregate Bond Index (6.8%). c. Cash on hand at fourth quarter ending was within guidelines. REGULAR AGENDA 9. FUNDS MANAGEMENT f. Quarterly Performance Report 2. Merrill Lynch – cont. Pimco a. The total portfolio return in the fourth quarter was 1.9%, ranking in the 29th percentile of the BofAML Domestic Fixed Income Sample. It exceeded the Custom Index (1.0%), and the Barclays Capital Aggregate Bond Index (1.1%). b. Their total portfolio return was 1.7% since inception (6/30/11). This trailed the Custom (4.7%), and the Barclays Capital Aggregate Bond Index (4.9%). c. Cash on hand at fourth quarter ending was above guidelines. Wamco a. The total portfolio return in the fourth quarter was 1.8%, ranking in the 31st percentile of the BofAML Domestic Fixed Income Sample. It exceeded the Custom Index (1.1%), and the Barclays Aggregate Bond Index (1.1%). b. Their total portfolio return was 2.8% since inception (6/310/11). This trailed the Custom (4.0%), and the Barclays Capital Aggregate Bond Index (4.9%). c. Cash on hand at fourth quarter ending was within guidelines. Horizon Asset Management a. The total portfolio return in the fourth quarter was 6.8%, ranking in the 99th percentile of the BofAML Domestic Large Cap Value Equity Sample. It trailed the Custom Index (12.9%), and the Russell 1000 Value Index (13.1%). b. Their total portfolio return was 14.7% since inception (12/31/08). This trailed the Custom (19.3%), and exceeded the Russell 1000 Value Index (11.5%). c. Cash on hand at fourth quarter ending was within guidelines. MD Sass a. The total portfolio return in the fourth quarter was 14.6%, ranking in the 7th percentile of the BofAML Domestic Large Cap Value Equity Sample. It exceeded the Custom Index (12.3%), and the Russell 1000 Value Index (13.1%). b. Their total portfolio return was 17.5% since inception (3/31/09). This trailed the Custom (19.1%), and the Russell 1000 Value Index (20.4%). c. Cash on hand at fourth quarter ending was within guidelines. REGULAR AGENDA 9. FUNDS MANAGEMENT f. Quarterly Performance Report 2. Merrill Lynch – cont. Atalanta a. The total portfolio return in the fourth quarter was 8.9%, ranking in the 69th percentile of the BofAML Domestic Large Cap Growth Equity Sample. It trailed the Custom Index (10.0%), and the Russell 1000 Growth Index (-13.1%). b. Their total portfolio return was 0.3% since inception (12/31/09). This trailed the Custom (4.5%), and the Russell 1000 Growth Index (10.6%). c. Cash on hand at fourth quarter ending was within guidelines. Janus Investment Counsel a. The total portfolio return in the fourth quarter was 8.4%, ranking in the 78th percentile of the BofAML Domestic Large Cap Growth Equity Sample. It trailed the Custom Index (10.4%), and the Russell 1000 Growth Index (10.6%). b. Their total portfolio return was 4.4% since inception (12/31/09). This trailed the Custom (9.2%), and the Russell 1000 Growth Index (9.5%). c. Cash on hand at fourth quarter ending was within guidelines. Earnest Partners a. The total portfolio return in the fourth quarter was 15.6%, ranking in the 35th percentile of the BofAML Domestic Small Cap Equity Sample. It exceeded the Custom Index (14.2%), and the Russell 2000 Index (15.5%). b. Their total portfolio return was 3.8% since inception (9/31/06). This exceeded the Custom (2.8%), and the Russell 2000 Index (1.8%). c. Cash on hand at fourth quarter ending was within guidelines. AIM/INVESCO Capital Management a. The total portfolio return in the fourth quarter was 8.6%, ranking in the 5th percentile of the BofAML International Equity Sample. It exceeded the Custom Index (3.3%), and the MSCI EAFE Index (3.3%). b. Their total portfolio return was -7.0% since inception (12/31/10). This exceeded the Custom (- 11.7%), and the MSCI EAFE Index (-12.1%). c. Cash on hand at fourth quarter ending was within guidelines. REGULAR AGENDA 9. FUNDS MANAGEMENT f. Quarterly Performance Report 2. Merrill Lynch - cont. NFJ/Allianz Global Investors a. The total portfolio return in the fourth quarter was 7.1%, ranking in the 15th percentile of the BofAML International Equity Sample. It exceeded the Custom Index (3.5%), and exceeded the MSCI EAFE Index (3.4%). b. Their total portfolio return was -9.6% since inception (12/31/10). This trailed the Custom (- 11.3%), and the MSCI EAFE Index (-11.8%). c. Cash on hand at fourth quarter ending was within guidelines. The following table details the Investment Performance Review for the quarter ending December 31, 2011. Market value of the funds under management as of December 31, 2011 was $159,446,150. The total fund return for the fourth quarter was 6.4%, ranking in the 40th percentile, as summarized below: 9/11 12/10 12/08 12/06 12/91 to 12/11 to 12/11 to 12/11 to 12/11 to 12/11 Total fund* 6.4/40 -2.9/92 8.6/81 0.4/98 6.6 *Ranked against the BofAML Domestic Balanced Sample - Total Total Portfolio Returns - Equity Sample Domestic# 10.0/60 -7.2/80 10.1/83 -1.3/70 7.3 #Ranked against the BofAML Domestic Equity Sample - Common Stock Total Portfolio Returns - Fixed Income Sample F.I.# 1.7/40 6.7/45 6.7/58 1.5/99 5.7 #Ranked against the BofAML Domestic Fixed Income Sample - Fixed Income Real Estate 0.3 0.6 5.3 2.9 15.6 The following manager specific return information is detailed separately from the other long- term data: 9/11 12/10 12/08 McDonnell to 12/11 to 12/11 to 12/11 Total Fund* 1.2/52 8.2/15 6.6/53 *Ranked against the BofAML Domestic Fixed Income Sample - Total REGULAR AGENDA 9. FUNDS MANAGEMENT f. Quarterly Performance Report 2. Merrill Lynch - cont. 9/11 6/11 Pimco to 12/11 to 12/11 Total Fund* 1.9/29 1.7/65 *Ranked against the BofAML Domestic Fixed Income Sample - Total 9/11 6/11 Wamco to 12/11 to 12/11 Total Fund* 1.8/31 2.8/52 *Ranked against the BofAML Domestic Fixed Income Sample - Total 9/11 12/10 3/09 MD Sass to 12/11 to 12/11 to 12/11 Total Fund* 14.6/7 -5.5/89 17.5/82 *Ranked against the BofAML Domestic Large Cap Value Equity Sample - Total 9/11 12/10 12/09 Janus to 12/11 to 12/11 to 12/11 Total Fund* 8.4/78 -5.3/83 4.4/86 *Ranked against the BofAML Domestic Large Cap Growth Equity Sample - Total 9/11 12/10 3/10 Atalanta to 12/11 to 12/11 to 12/11 Total Fund* 8.9/69 -7.2/89 -2.2/98 *Ranked against the BofAML Domestic Large Cap Growth Equity Sample - Total 9/11 12/10 12/08 12/06 9/06 Earnest to 12/11 to 12/11 to 12/11 to 12/11 to 12/11 Total Fund* 15.6/35 -2.2/49 21.0/32 2.8/40 3.8/48 *Ranked against the BofAML Domestic Small Cap Equity Sample – Total 9/11 12/10 Invesco to 12/11 to 12/11 Total Fund* 8.6/5 -7.0/15 *Ranked against the BofAML International Common Stock Sample - Total 9/11 12/10 Allianz to 12/11 to 12/11 Total Fund* 7.1/15 -9.6/27 *Ranked against the BofAML International Common Stock Sample - Total REGULAR AGENDA 9. FUNDS MANAGEMENT f. Quarterly Performance Report 2. Merrill Lynch – cont. Tim Brice presented the Board with information for a large cap growth equity manager search. The Board will hold a special meeting on March 1, 2012 to interview candidates. The Board returned to the published agenda. REGULAR AGENDA 8. APPROVAL OF BILLS AND EXPENDITURES a. Disbursements (bills, etc.) other than retiree benefit payments 1. Disbursement to Comerica Bank in the total amount of $3,734.25 for services rendered to the Clearing, Intercontinental, McDonnell, and MD Sass accounts for the quarter ended 12/31/11. 2. Disbursement to Merrill Lynch Private Client Group in the amount of $9,050.00 for consulting services for the period of 1/1/12 through 9/28/12. 3. Disbursement to McDonnell Investment Management in the amount of $7,891.60 for investment management fees for the quarter ended 12/31/11. 4. Disbursement to Horizon in the amount of $20,692.84 for quarterly investment management fees for the quarter ended 12/31/11. 5. Disbursement to Merrill Lynch in the amount of $10,196.52 for quarterly SPA fee for the Horizon account for the quarter ended 3/31/12. 6. Disbursement to Merrill Lynch in the amount of $23,627.67 for quarterly Consults fee for the AIM/Invesco account for the quarter ended 3/31/12. 7. Disbursement to Merrill Lynch in the amount of $32,193.67 for quarterly Consults fee for the Janus account for the quarter ended 3/31/12. Motion by Padovini, supported by Nash, to approve the disbursements as presented. Ayes: All. The motion carried. REGULAR AGENDA – cont. 10. BENEFITS & PLAN ADMINISTRATION a. Old Business 3. 2011 STD/LTD report - discussion The Board received a listing of Police and Fire members who were off on short-term/long term disability during 2011 from the City Human Resources/Risk Management Department. Persons affected by periods of STD/LTD were sent correspondence detailing the preliminary findings according to the report and the amount of time that may be lost net of the sixty-day allowance permitted by Act 345. Total Total Total Adjusted Member Name Days Off Days credited Lost time Ret. Date Beaupre, Jon 121 60 61 8/28/97 Cook, Julie 97 60 37 3/05/96 Jesperson, Tonya 6 6 0 N/A Kitchen, Michelle 88 60 28 9/03/01 Merpi, Maureen 11 11 0 N/A Pappas, Kenneth 7 7 0 N/A Schmaltz, Dale 14 14 0 N/A Willard, Matthew 2 2 0 N/A Wood, James 93 60 33 7/19/90 Smith, Thomas 38 38 0 N/A Werback, Richard 36 36 0 N/A Slezak, Christopher 365 60 05 7/06/00 It was noted that Christopher Slezak was off on Long Term Disability from January 1, 2011 through December 31, 2011. Motion by Padovini, supported by Nash, to approve the 2011 short-term/long-term disability reports, with credits and adjustments as listed. Ayes: All. The motion carried. 4. George Binno – DROP distribution – discussion Battalion Chief George Binno of the Fire Department terminated his DROP retirement as of March 1, 2009. He requested a total balance DROP distribution from his DROP account. REGULAR AGENDA 10. BENEFITS & PLAN ADMINISTRATION a. Old Business 4. George Binno – DROP distribution – discussion – cont. Motion by Wellhausen, supported by Solak, to approve the DROP distribution as presented. Ayes: All. The motion carried. 5. Larry Furlow – survivor benefit - discussion Retired Fire Lt. Larry Furlow passed away on February 4, 2012. At retirement, Lt. Furlow chose a Regular retirement with the automatic 60% to his wife, Sherry. An application for survivor benefits has been received as well as a copy of Mr. Furlow’s death certificate. After discussion, the following resolution was considered: L 12-2-16-1 RE: LARRY FURLOW – RETIREE DEATH WHEREAS, the Board of Trustees is vested with the authority and fiduciary responsibility for the administration, management and operation of the Retirement System, and WHEREAS, the Board of Trustees has been advised that Larry Furlow passed away on February 4, 2012, and WHEREAS, upon his retirement on July 16, 1991, Larry Furlow selected a regular retirement pension benefit with an automatic sixty percent surviving spouse benefit, and WHEREAS, Section 6(1)(h) of Public Act 345 of 1937, as amended, provides in pertinent part that upon the death of a retirant who is receiving a regular retirement pension, his or her spouse, if living, shall receive a pension equal to 60% of the regular retirement pension the deceased was receiving, and WHEREAS, Larry Furlow is survived by his wife, Sherry Furlow, therefore be it RESOLVED, that the Board of Trustees wishes to express its condolences to the family and friends of Larry Furlow, and further Regular Meeting Minutes – February 16, 2012 Page Thirteen REGULAR AGENDA 10. BENEFITS & PLAN ADMINISTRATION a. Old Business 5. Larry Furlow – survivor benefit – discussion – cont. RESOLVED, that the Board of Trustees hereby directs that pension benefits be made payable to Sherry Furlow in the amount of $1,767.40 consistent with Retirement System provisions, and further RESOLVED, that the Board of Trustees has received a certified copy of Larry Furlow’s death certificate for its files, and further RESOLVED, that a copy of this resolution be forwarded to Sherry Furlow. Motion by Wellhausen, supported by Solak, to adopt the resolution as presented. Ayes: All. The resolution is hereby adopted. 6. Account transfer for March benefit payments – discussion The Board reviewed its mechanism for the transfer of funds to ensure funding for monthly benefits for March 1, 2012. Merrill Lynch has reported that based on the asset allocation targets, the additional funding should come from the Janus and Atalanta accounts equally. Motion by Varney, supported by Wellhausen, to approve the transfer of the appropriate amount of funds from the Janus and Atalanta accounts equally to provide for pension benefit payments and other disbursements on March 1, 2012, based on asset allocation targets. Ayes: All. The motion carried. 7. Brandon Flynn – municipal buyback application – 2 years - discussion The above named individual has submitted an application for buyback of municipal time as noted. All required paperwork is on file in the Pension Office. Motion by Wellhausen, supported by Solak, to approve the municipal buyback application. REGULAR AGENDA 10. BENEFITS & PLAN ADMINISTRATION a. Old Business 7. Brandon Flynn – municipal buyback application – 2 years – discussion – cont. Ayes: All. The motion carried. 8. Joseph Toth - DROP resolution – discussion Fire Lieutenant Joseph Toth applied for the DROP from the Fire Department effective January 4, 2012. All required paperwork is on file in the Pension Office. The following DROP resolution was considered: R 12-2-16-2 WHEREAS, LIEUTENANT JOSEPH TOTH of the Fire Department has voluntarily elected to participate in the DROP per application dated October 18, 2011, as submitted to the Police and Fire Retirement Board, and WHEREAS, LIEUTENANT JOSEPH TOTH has elected to DROP, effective January 4, 2012, per Appendix A of the applicable collective bargaining agreement, and WHEREAS, LIEUTENANT JOSEPH TOTH has served the City of Sterling Heights Fire Department for 23 years, which includes 6 years of municipal service credit, as of the date of the DROP election, and WHEREAS, the Trustees of the Police and Fire Retirement Board, Act 345 have verified that LIEUTENANT JOSEPH TOTH meets all those requirements for participation in the DROP as established in both Act 345 and the applicable collective bargaining agreement, and WHEREAS, the Trustees have provided all the necessary personal and financial data to the Board’s Actuary as it relates to LIEUTENANT JOSEPH TOTH and his spouse, PATRICIA TOTH, and the necessary reports have been reviewed and completed by the Actuary, which includes a copy of his marriage license and his spouse’s full name, documentation re: date of birth, and social security number, and REGULAR AGENDA 10. BENEFITS & PLAN ADMINISTRATION a. Old Business 8. Joseph Toth – DROP resolution – discussion – cont. WHEREAS, LIEUTENANT JOSEPH TOTH has reviewed this data and has elected to receive his DROP participation benefit in the form of a regular retirement pension with a potential benefit of sixty (60%) percent of the regular retirement pension being paid to his surviving spouse, who must also be his spouse on the effective date of retirement and death, and WHEREAS, the forenamed member has not 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 Actuary for the updated retirement data. The actuary has indicated to the Board, in writing, the retirement benefits due LIEUTENANT JOSEPH TOTH, as a result of this data, therefore be it RESOLVED, that LIEUTENANT JOSEPH TOTH, after having been credited with 23 years, as of the date of the DROP election, is hereby granted DROP participation in accordance with Act 345 and the collective bargaining agreement, effective January 4, 2012, and further RESOLVED, that LIEUTENANT JOSEPH TOTH shall be paid a yearly regular retirement pay in the amount of $76,964.40 or monthly benefits of $6,413.70, during the period of DROP participation and after termination of employment because distribution of the annuity withdrawal was not requested, and further RESOLVED, that the Treasurer shall immediately calculate and pay LIEUTENANT JOSEPH TOTH the appropriate amounts. All amounts shall be paid into the DROP account until the date of termination, after which time distribution shall be made in accordance with the collective bargaining agreement. Motion by Wellhausen, supported by Solak, to adopt the resolution as presented. Ayes: All. The motion carried; the resolution is hereby adopted. REGULAR AGENDA 10. BENEFITS & PLAN ADMINISTRATION a. Old Business – cont. 9. Henry Yanez - DROP resolution – discussion Fire Lieutenant Henry Yanez applied for the DROP from the Fire Department effective January 4, 2012. All required paperwork is on file in the Pension Office. The following DROP resolution was considered: R 12-2-16-3 WHEREAS, LIEUTENANT HENRY YANEZ of the Fire Department has voluntarily elected to participate in the DROP per application dated November 10, 2011, as submitted to the Police and Fire Retirement Board, and WHEREAS, LIEUTENANT HENRY YANEZ has elected to DROP, effective January 4, 2012, per Appendix A of the applicable collective bargaining agreement, and WHEREAS, LIEUTENANT HENRY YANEZ has served the City of Sterling Heights Fire Department for 24 years, which includes 5 years of municipal service credit and 2 years and 28 days of EMS service credit, as of the date of the DROP election, and WHEREAS, the Trustees of the Police and Fire Retirement Board, Act 345 have verified that LIEUTENANT HENRY YANEZ meets all those requirements for participation in the DROP as established in both Act 345 and the applicable collective bargaining agreement, and WHEREAS, the Trustees have provided all the necessary personal and financial data to the Board’s Actuary as it relates to LIEUTENANT HENRY YANEZ, a single man, and the necessary reports have been reviewed and completed by the Actuary, which includes a copy of his documentation re: date of birth, and social security number, and WHEREAS, LIEUTENANT HENRY YANEZ has reviewed this data and has elected to receive his DROP participation benefit in the form of a regular retirement pension with a potential benefit of sixty (60%) percent of the regular retirement pension being paid to his surviving spouse, who must also be his spouse on the effective date of retirement and death, and REGULAR AGENDA 10. BENEFITS & PLAN ADMINISTRATION a. Old Business 9. Henry Yanez – DROP resolution – discussion – cont. WHEREAS, the Trustees acknowledge that an EDRO is on file with the Board, and shall pay pension benefits consistent with said Court Order, 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 Actuary for the updated retirement data. The actuary has indicated to the Board, in writing, the retirement benefits due LIEUTENANT HENRY YANEZ as a result of this data, therefore be it RESOLVED, that LIEUTENANT HENRY YANEZ after having been credited with 24 years as of the date of the DROP election, and is hereby granted DROP participation in accordance with Act 345 and the collective bargaining agreement, effective January 4, 2012, and further RESOLVED, that LIEUTENANT HENRY YANEZ’s request for annuity withdrawal, authorizing a payment representing the total amount of his contribution plus interest to the date of his participation in the DROP, be granted, and further RESOLVED, that LIEUTENANT HENRY YANEZ shall be paid an annuity withdrawal (total lump sum distribution from the defined contribution plan) of $78,681.73, and a yearly regular retirement pay in the amount of $73,412.40 or monthly benefits of $6,117.70, after DROP participation and termination of employment, and further RESOLVED, that LIEUTENANT HENRY YANEZ shall be credited $6,649.67 monthly during the period of DROP participation because distribution of the annuity withdrawal was deferred until termination of employment, and further RESOLVED, that the Treasurer shall immediately calculate and pay LIEUTENANT HENRY YANEZ the appropriate amounts. All amounts shall be paid into the DROP account until the date of termination, after which time distribution shall be made in accordance with the collective bargaining agreement. REGULAR AGENDA 10. BENEFITS & PLAN ADMINISTRATION a. Old Business 9. Henry Yanez – DROP resolution – discussion – cont. Motion by Wellhausen, supported by Solak, to adopt the resolution as presented. Ayes: All. The motion carried; the resolution is hereby adopted. 10. Joann Spence – EDRO benefit resolution – discussion Joann Spence, Alternate Payee of Police Officer James Spence Jr., has supplied the necessary paperwork to start receiving her monthly benefit as stipulated in the EDRO as of February 3, 2012. All required paperwork is on file in the Pension Office. After discussion, the following resolution was considered: L 12-2-16-4 Re: JOANN SPENCE EDRO BENEFIT WHEREAS, the City of Sterling Heights Police and Fire Retirement System consists of a defined benefit plan and defined contribution plan which are qualified plans under applicable provisions of the Internal Revenue Code, and WHEREAS, the Retirement System is generally subject to Public Act 46 of 1991 of the State of Michigan statutes (MCLA 38.1701, et seq.), and WHEREAS, the Board of Trustees previously received an Eligible Domestic Relations Order, dated December 12, 2006, purporting to grant Joann Spence with certain rights and claims regarding Retirement System benefits normally payable to James Spence Jr., who elected a DROP retirement as of June 18, 2011, and WHEREAS, the Board, at its meeting of January 30, 2007, approved the Eligible Domestic Relations Order, dated December 12, 2006 wherein Joann Spence, the former spouse of the member, was granted certain rights to the Defined Benefit Plan and the Defined Contribution Plan benefit of the aforesaid member, and REGULAR AGENDA 10. BENEFITS & PLAN ADMINISTRATION a. Old Business 10. Joann Spence – EDRO benefit resolution – discussion – cont. WHEREAS, the defined contribution plan division of benefits and said annuity withdrawal are subject to the terms of the December 12, 2006 EDRO and accordingly, the former spouse, Joann Spence, shall receive fifty (50%) per cent portion of the member’s Defined Contribution Plan (annuity account) which has accrued from the date of marriage to May 1, 2006, and WHEREAS, the benefits payable from the Defined Benefit Plan are subject to the terms of the December 12, 2006 EDRO, and accordingly, the former spouse, Joann Spence, shall receive fifty (50%) per cent portion of the member’s Defined Benefit Plan benefits which has accrued from the date of marriage to May 1, 2006, and WHEREAS, Joann Spence has elected to receive her actuarial reduced benefit over her lifetime, and THEREFORE, BE IT RESOLVED, that the Board hereby acknowledges receipt of the Eligible Domestic Relations Order, dated December 12, 2006, and shall pay pension benefits consistent with said Court Order, and further RESOLVED, that in accordance with the EDRO, Joann Spence shall be paid an annuity withdrawal (total lump sum distribution from the defined contribution plan) of $28,997.30 and a yearly regular retirement pay in the amount of $11,490.96 or monthly benefits of $957.58. That the Treasurer shall immediately calculate and pay Joann Spence the appropriate amount effective February 3, 2012, and further RESOLVED, that pension benefits, consistent with the elections herein and in accordance with the provisions of the December 12, 2006 EDRO, be paid to the former spouse, Joann Spence. Motion by Solak, supported by Wellhausen, to adopt the resolution as presented. Ayes: All. The motion carried; the resolution is hereby adopted. 11. Trustee Comments – None 12. ADJOURNMENT Motion by Padovini, supported by Wellhausen, to adjourn at 6:00 p.m. Ayes: All. The motion carried; the meeting is hereby adjourned. Mark Wellhausen Secretary