Police & Fire Retirement Board

REGULAR MEETING MINUTES OF THE STERLING HEIGHTS POLICE AND FIRE RETIREMENT SYSTEM, ACT 345 MARCH 20, 2014 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 Lamerato at 3:30 p.m. 2. Board Members present: Lamerato, Maleszyk, Varney, Wellhausen (arrived at 3:35 p.m.). Absent: Solak. Also present: Sandra Rodwan and Denise Jones representing Rodwan Consulting Company; Walt Hessell, Pension Accountant; Tom Michaud, Legal Counsel; and Nancy Duyck, Pension Technician. 3. APPROVAL OF CONSENT AND REGULAR AGENDAS Motion by Varney, supported by Maleszyk, to approve the consent agenda as presented. Ayes: Lamerato, Maleszyk, Varney. Absent: Solak and Wellhausen. The motion carried. Motion by Varney, supported by Maleszyk, to approve the regular agenda as presented. Ayes: Lamerato, Maleszyk, Varney. Absent: Solak and Wellhausen. The motion carried. 4. APPROVAL OF MINUTES No corrections were made to the draft minutes of the regular meeting of February 20, 2014. Motion by Maleszyk, supported by Lamerato, to approve the minutes as presented.  Ayes: Lamerato, Maleszyk, Varney. Absent: Solak and Wellhausen. The motion carried; the minutes of the regular meeting of February 20, 2014 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. FOIA Correspondence from Kevin Burkhart dated March 3, 2014 re: portfolio monitoring and Board response dated March 10, 2014. b. Other correspondence received from: 1. ING Investment Management Update 2. Invesco - Form ADV Part 2A received 3. MAPERS Pension Scope newsletter 4. Merrill Lynch – market value updates 5. P & I Conferences 6. Pomerantz LLP newsletter 7. Robbins Geller Rudman & Dowd LLP 8. UNC Conferences c. Magazines received: 1. Institutional Investor for March 2014 2. Plan Sponsor for March 2014 3. Pensions & Investments for March 3 and 17, 2014. 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. Beginning Balance $4,452.90 2/01/14 Additions (1)  1. 2/27 $5,000.00 Subtractions (4) $2,067.77 1. 2/27 Check 1931 44.21 AT & T phone bill – 2/16/14 . 2/14 Check 5278 VOID . 2/14 Check 5279 VOID 2. 2/14 Check 5280 910.15 Contract Payment Nancy Duyck 3. 2/21 Check 5281 203.27 Contract fee – Gurin & Gurin 4. 2/28 Check 5282 910.14 Contract Payment Nancy Duyck Electronic withdrawals(4) $1,602.48 1. 2/05 376.83 IRS Fed. tax w/h 2. 2/18 692.31 IRA contribution Michigan St. tax 3. 2/20 156.51 w/h 4. 2/20 376.83 IRS Fed. tax w/h Ending $ 2/28/14 Balance 5,782.65 d. Transmittal of Checks 1. $17,643.68 received from GCG as a pro rata share of the net settlement in the Comerica Securities Lending litigation. 9. FUNDS MANAGEMENT a. The current value of funds as of February 28, 2014 is detailed below: Clearing account $ 168,312.12 Intercontinental $ 9,322,156.03 Winslow $ 24,263,131.54 Janus $ 23,941,632.83 Eagle $ 23,033,379.59 Herndon $ 22,620,140.07 Earnest Partners $ 13,421,173.12 NFJ/Allianz $ 16,868,129.30 AIM/Invesco $ 17,312,250.98 Pimco $ 23,558,698.30 Wamco $ 24,489,369.45 Checking account $ 5,782.65 TOTAL FUNDS $ 199,004,155.98 b. The Board received a copy of the Summary of Employer Contributions to the Police and Fire Retirement System for the 2013 tax year as of 2/13/14. The System has received $7,192,467.43 of the 2013/14 budget of $8,095,472.00, leaving a $903,004.57 balance. c. Benefit Register Listing as of March 1, 2014 from Comerica Bank showing 302 retirees/beneficiaries with a payout for March of $1,196,086.15 and a year-to-date of $3,780,147.40. d. The current Merrill Lynch Bond index for February 2014 is 2.08%. 10. BENEFITS & PLAN ADMINISTRATION a. Old Business Abel/Noser Reports for January 2014 Abel/Noser has supplied the January 2014 report. REGULAR AGENDA 8. BILLS AND EXPENDITURES a. Disbursements other than retiree benefit payments (bills) – cont. There were no bills for payment this month. 10. BENEFITS & PLAN ADMINISTRATION a. Old Business 2. 2014 MAPERS Spring Conference – discussion  The Board has received registration information for the 2014 MAPERS Spring Conference. It is scheduled for May 18-20, 2014 at the Soaring Eagle Resort in Mt. Pleasant, MI. Three members are budgeted to attend this conference. Motion by Varney, supported by Lamerato, to register four members for the Spring MAPERS conference. Ayes: Lamerato, Maleszyk, Varney. Absent: Solak and Wellhausen. The motion carried. 3. Account transfer for April 2014 benefit payments – discussion As of March 17, 2014, the Clearing Account had a balance of $167,999.37. An additional $1,085,000.00 is needed for the April 1, 2014 pension benefit payments and bills from the Clearing Account. Merrill Lynch has forwarded an e-mail that the additional amount needed should be taken from the PIMCO and WAMCO accounts equally, based on the asset allocation targets. Motion by Lamerato, supported by Maleszyk, to approve the transfer of the appropriate amount of funds from the PIMCO and WAMCO accounts equally, based on the asset allocation targets, to provide for pension benefit payments and other disbursements on April 1, 2014. Ayes: Lamerato, Maleszyk, Varney. Absent: Solak and Wellhausen. The motion carried. Mr. Wellhausen arrived at 3:35 p.m. The Presentation was taken out of order of the published agenda. PRESENTATION ANNUAL ACTUARIAL VALUATION REPORT BY RODWAN CONSULTING COMPANY Sandra Rodwan and Denise Jones from Rowan Consulting Company were in attendance to present the 45th annual actuarial report dated December 31, 2013. The report was discussed at length. The Board reviewed the comments by the actuary. After discussion, the following resolution was considered: L 14-3-20-1 RE: APPROVAL OF 45TH ANNUAL ACTUARIAL VALUATION WHEREAS, the Board is in receipt of the 45th Annual Actuarial Valuation, dated December 31, 2013, which has been submitted by the actuary to the Board of Trustees for consideration and approval, and WHEREAS, representatives of the Board’s actuary have appeared before the Board at its March 20, 2014 meeting and presented and reviewed the valuation report with the Board, and WHEREAS, the Board of Trustees has the legal and fiduciary obligation to assure that employer contributions are in accordance with Article 9, Section 24 of the State of Michigan Constitution, and WHEREAS, Michigan Public Act 345 of 1937, as amended, requires the Board of Trustees to certify to the governing body the amount to be contributed by the employer, and WHEREAS, the Board has the duty to (1) to approve or disapprove the Actuarial Valuation dated December 31, 2013, and (2) to certify to the employer-City the amount of employer contribution required for the fiscal year beginning July 1, 2014 (as reflected by the December 31, 2013 Actuarial Valuation), and WHEREAS, the Board notes that the Sterling Heights Police and Fire Retirement System is 67.4% funded as of the December 31, 2013 valuation, and THEREFORE BE IT RESOLVED, that the Board hereby approves the 45th Annual Actuarial Valuation, dated December 31, 2013, and further RESOLVED, the Board hereby certifies to the employer-City the employer contribution required for the fiscal year beginning July 1, 2014 (as reflected by the December 31, 2013 Actuarial Valuation) in the amount of $7,953,970.00, consisting of the City contribution and the 8% contained in the Police Command Officers Association contract, the Police Officers Association contract, and the Fire Fighters Association contract, and further RESOLVED, that the recommended transfer in the amount of $6,565,642.00 to the Reserve for Retired Benefit Payments from the Reserve for Employer Contributions be made, and further RESOLVED, that a copy of this resolution and the 45th Annual Actuarial Report, dated December 31, 2013, be forwarded to the employer-City.  Motion by Wellhausen, supported by Varney, to approve the resolution as presented. Ayes: Wellhausen, Lamerato, Maleszyk, Varney. Absent: Solak. The motion carried; the resolution is hereby adopted. 11. Trustee Comments None. 12. ADJOURNMENT Motion by Lamerato, supported by Wellhausen, to adjourn at 4:10 p.m. Ayes: Wellhausen, Lamerato, Maleszyk, Varney. Absent: Solak. The motion carried; the meeting is hereby adjourned. Mark Wellhausen Secretary