Police & Fire Retirement Board

REGULAR MEETING MINUTES OF THE STERLING HEIGHTS POLICE AND FIRE RETIREMENT SYSTEM, ACT 345 JUNE 19, 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 3:35 p.m. 2. Board Members present: Lamerato, Wellhausen, Schwarb, Maleszyk, Varney. Also present: Raymond Urban representing Winslow Capital; 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 Schwarb, 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 12 SHPOA Letter - discussion 13 Fall MAPERS Conference – discussion Motion by Schwarb, supported by Wellhausen, to approve the regular agenda as amended. Ayes: All. The motion carried. Regular Meeting Minutes – June 19, 2014 Page Two 4. APPROVAL OF MINUTES No corrections were made to the draft minutes of the regular meeting of May 15, 2014. Motion by Maleszyk, supported by Schwarb, to approve the minutes as presented. Ayes: All. The motion carried; the minutes of the regular meeting of May 15, 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 Item No. 10a7 – Actuarial Funding Policy under the Legal Report. This new policy relates to the new GASB 67 standards and reporting and will be sent to the actuary for their review before adoption by the Board. Mr. Michaud commented on items of old business as they were considered. CONSENT AGENDA 7. CORRESPONDENCE a. Updated Board Terms b. Correspondence from Intercontinental dated May 8, 2014 re: distribution in Intercontinental Real Estate Investment Fund III. c. Correspondence from Intercontinental dated May 19, 2014 re: distribution in U.S. REIF Fund. d. Other correspondence received from: 1. Association of Benefit Administrators Spring newsletter 2. International Foundation membership information 3. Merrill Lynch – market value updates 4. Robbins Geller Rudman & Dowd LLP 5. Voya Investment Management update e. Magazines received: 1. Institutional Investor for June 2014 2. Pensions & Investments for May 26 and June 9, 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. c. Checking Account Summary Beginning Balance $2,546.08 5/01/14 Additions (1) 1. 5/6 $5,000.00  Subtractions (4) $1,972.32 1. 5/21 Check 1941 73.83 MW-Peg-Master Printing Member file folders 2. 5/09 Check 5291 910.15 Contract Payment Nancy Duyck 3. 5/08 Check 5292 78.20 Contract fee – Gurin & Gurin 4. 5/23 Check 5293 910.14 Contract Payment Nancy Duyck Electronic withdrawals (4) $1,319.56 1. 5/12 461.54 IRA contribution 2. 5/14 376.83 IRS Fed. tax w/h 3. 5/20 104.34 Michigan St. tax w/h 4. 5/29 376.85 IRS Fed. tax w/h Ending Balance $ 4,254.20 5/31/14 d. Transmittal of Checks 1. $66,034.34 received from David Cueny through payroll deduction for the purchase of 3 years of eligible EMS service credit. This was the final payment for the purchase, which started on June 23, 2011. 9. FUNDS MANAGEMENT The current value of funds as of May 31, 2014 is detailed below: Clearing account $ 437,392.71 Intercontinental $ 9,322,192.19 Winslow $ 23,749,333.03 Janus $ 23,153,839.73 Eagle $ 23,872,923.77 Herndon $ 23,384,843.15 Earnest Partners $ 13,639,281.63 NFJ/Allianz $ 17,401,561.62 AIM/Invesco $ 17,856,974.27 Wamco $ 23,342,272.38 Pimco $ 22,189,778.44 Checking account $ 4,254.20  TOTAL FUNDS $ 198,630,258.53 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 June 1, 2014 from Comerica Bank showing 304 retirees/beneficiaries with a payout for June of $1,204,179.17 and a year-to-date of $7,405,704.86. d. The current Merrill Lynch Bond index for May 2014 is 2.00%. 10. BENEFITS & PLAN ADMINISTRATION a. Old Business 1. Abel/Noser Reports for April 2014 Abel/Noser has supplied the April 2014 report. 2. David Cueny – adjusted hire (retirement) date The adjusted hire (retirement) date for Fire Fighter David Cueny is June 16, 1998 after the purchase of 3 years of eligible EMS service credit. REGULAR AGENDA 8. BILLS AND EXPENDITURES a. Disbursements other than retiree benefit payments (bills) There were no bills for payment this month. 9. FUNDS MANAGEMENT e. Performance report 1. Winslow Capital – discussion Raymond Urban of Winslow Capital was in attendance to discuss their performance with the Board. They had forwarded a detailed report regarding funds under their management. He reviewed the report and also responded to individual Board member’s questions. Market value of the funds under management as of March 31, 2014 was $23,290,507. The total fund return for the first quarter 2014 was -1.2%, ranking in the 91st percentile, as summarized below:  12/13 3/13 3/12 Winslow to 3/14 to 3/14 to 3/14 Total Fund* -1.2/91 23.8/51 14.5/81 *Ranked against the BofAML Dom. Large Cap Growth Equity Sample – Total Mr. Urban reported that Nuveen, the parent company of Winslow Capital, was sold to TIAA- CREF in April 2014 with no change in personnel. Mr. Brice suggested that Earnest Partners be brought in at the next quarterly meeting in August. He will also supply a modeling study with active versus passive. 10. BENEFITS & PLAN ADMINISTRATION a. Old Business 3. Dennis Adler – DROP retirement termination information – discussion Assistant Chief Dennis Adler of the Fire Department terminated his DROP retirement as of May 30, 2014. All required paperwork is on file in the Pension Office. Motion by Wellhausen, supported by Schwarb, to approve the disbursement for the regular pension and annuity withdrawal and process the retirement certificate as submitted. Ayes: All. The motion carried. 4. Eric Norris – DROP retirement termination information – discussion Captain Eric Norris of the Fire Department terminated his DROP retirement as of June 11, 2014. All required paperwork is on file in the Pension Office. Motion by Wellhausen, supported by Schwarb, to approve the disbursement for the regular pension and annuity withdrawal and process the retirement certificate as submitted. Ayes: All. The motion carried. 5. Luther Riley – DROP retirement termination information – discussion Lieutenant Luther Riley of the Police Department terminated his DROP retirement as of June 16, 2014. He also requested the rollover of his entire DROP account. All required paperwork is on file in the Pension Office. Motion by Schwarb, supported by Varney, to approve the disbursement for the regular pension and DROP account and process the retirement certificate as submitted. Ayes: All. The motion carried. 6. Donald Sypniewski - partial DROP distribution – discussion 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. All required paperwork is on file in the Pension Office. Motion by Schwarb, supported by Wellhausen, to approve the partial DROP distribution as presented. Ayes: All. The motion carried. 7. Actuarial Funding Policy – discussion This item was discussed under the Report From Legal Counsel. 8. 2014/15 Meeting Schedule - discussion The meeting schedule for 2014/15 fiscal year must be approved and posted. The dates for the regular meetings of the Sterling Heights Police & Fire Retirement System for the 2014/15 fiscal year are as follows: July 17, 2014 at 3:30 pm August 21, 2014 at 3:30 pm September 18, 2014 at 3:30 pm October 16, 2014 at 3:30 pm November 20, 2014 at 3:30 pm December 18, 2014 at 3:30 pm January 15, 2015 at 3:30 pm February 19, 2015 at 3:30 pm March 19, 2015 at 3:30 pm April 16, 2015 at 3:30 pm May 21, 2015 at 3:30 pm June 18, 2015 at 3:30 pm Motion by Wellhausen, supported by Varney, to approve the meeting dates for the fiscal year 2014/15 as presented. Ayes: All. The motion carried. 4. Election of Officers - discussion The Board elected Officers for the 2014/15 fiscal year as follows. President – John Lamerato Secretary – Mark Wellhausen Motion by Varney, supported by Maleszyk, to certify the election results. Ayes: All. The motion carried. It was noted that Robert Maleszyk was re-appointed by City Council as an appointed representative on the Board for a term expiring June 30, 2018. 10. Ken Solak Testimonial resolution – discussion A testimonial resolution was presented to Kenneth Solak recognizing him for serving as a Board Trustee/President on the Board for the Sterling Heights Police & Fire Retirement System from July 1, 2000 to April 7, 2014. Testimonial Resolution of Appreciation for Trustee KENNETH SOLAK By: The Trustees of the Sterling Heights Police and Fire Retirement System JUNE 19, 2014 WHEREAS, Kenneth Solak has faithfully served the Sterling Heights Police and Fire Retirement System as a Trustee/President pursuant to applicable Retirement System provisions, and WHEREAS, Trustee Solak immediately displayed an understanding of the fiduciary responsibilities a Trustee must have to serve the members and beneficiaries of the Retirement System, and WHEREAS, Trustee Solak carried out his fiduciary responsibilities with dedication, sincerity, scholarship, hard work and honor and has provided distinguished service to the Board and the members and beneficiaries of the Retirement System, and WHEREAS, the Trustees, the members and beneficiaries of the Retirement System, the City employees and citizenry owe a debt of gratitude to Trustee Solak for his sacrifice and service to the Retirement System, therefore be it RESOLVED, that the Board of Trustees, on behalf of itself and all concerned, hereby expresses its gratitude and appreciation to Trustee Solak for his honorable and distinguished service as a Trustee, and further RESOLVED, that the Board of Trustees, on behalf of all the aforementioned parties, says "Thank You Ken for a Job Well Done". Motion by Wellhausen, supported by Varney, to adopt the resolution as presented. Ayes: All. The motion carried; the resolution is hereby adopted. 11. Account transfer for July 2014 benefit payments – discussion As of June 16, 2014, the Clearing Account had a balance of $361,171.01. An additional $1,500,000.00 is needed for the July 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 NFJ and Invesco accounts equally, based on the asset allocation targets. Motion by Varney, supported by Wellhausen, to approve the transfer of the appropriate amount of funds from the NFJ and Invesco accounts equally, based on the asset allocation targets, to provide for pension benefit payments and other disbursements on July 1, 2014. Ayes: All. The motion carried. 12. SHPOA letter – discussion Trustee Schwarb presented the Board with a letter from the Sterling Heights Police Officers Association requesting information from the actuary needed for ongoing negotiations. Motion by Wellhausen, supported by Schwarb, to receive and file the letter from the Sterling Heights Police Officers Association and forward it to the actuary, Rodwan Consulting Company. Ayes: All. The motion carried. 13. 2014 MAPERS Fall Conference – discussion The Board has received through e-mail registration information for the 2014 MAPERS Fall Conference. It is scheduled for September 14-16, 2014 at the Grand Traverse Resort in Acme, MI. Three members are budgeted to attend this conference. Motion by Varney, supported by Wellhausen, to register three members for the Fall MAPERS Conference. Ayes: All. The motion carried. Maleszyk and Varney are unable to attend the conference. 11. Trustee Comments The Securities litigation report will be available next month. 12. ADJOURNMENT Motion by Varney, supported by Wellhausen, to adjourn at 5:13 p.m. Ayes: All. The motion carried; the meeting is hereby adjourned. Mark Wellhausen Secretary