Police & Fire Retirement Board

REGULAR MEETING MINUTES OF THE STERLING HEIGHTS POLICE AND FIRE RETIREMENT SYSTEM, ACT 345 OCTOBER 16, 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 President Lamerato at 3:30 p.m. 2. Board Members present: Lamerato, Wellhausen, Schwarb, Maleszyk, Varney. Also present: Tom Michaud, Legal Counsel; and Nancy Duyck, Pension Technician. 3. APPROVAL OF CONSENT AND REGULAR AGENDAS Motion by Wellhausen, supported by Schwarb, to approve the consent agenda as presented. Ayes: All. The motion carried. The following item was added to the regular agenda: 10 a 8 Mark Johnson – partial DROP distribution - discussion Motion by Wellhausen, supported by Schwarb, 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 of September 18, 2014. Motion by Varney, supported by Maleszyk, to approve the minutes as presented. Ayes: All. The motion carried. The motion carried; the minutes of the regular meeting of September 18, 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. Other correspondence received from: 1. Bernstein Litowitz Berger & Grossman LLP 2. Robbins Geller Rudman & Dowd LLP b. Magazines received: 1. Institutional Investor for September 2014 2. Pensions & Investments for September 29 and October13, 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 $5,922.86 9/01/14 Subtractions (5) $2,029.11 Check 1. 9/19 58.29 MW – new PF phone 1952 Check AT & T phone bill – 2. 9/26 33.23 1953 8/16/14 Check Contract Payment Nancy 3. 9/12 910.14 5304 Duyck Check Contract fee – Gurin & 4. 9/10 117.30 5305 Gurin Check Contract Payment Nancy 5. 9/26 910.15 5306 Duyck  Electronic withdrawals (4) $1,602.50 1. 9/04 376.83 IRS Fed. tax w/h 2. 9/15 692.31 IRA contribution 3. 9/22 156.51 Michigan St. tax w/h 4. 9/17 376.85 IRS Fed. tax w/h Ending Balance $ 2,291.25 9/30/14 d. Transmittal of Checks 1. $3,440.90 received from LPS Securities Litigation as a share in a settlement of litigation. 9. FUNDS MANAGEMENT a. The current value of funds as of September 30, 2014 is detailed below: Clearing account $ 7,081,957.22 Intercontinental $ 11,261,156.19 Winslow $ 24,162,144.14 Janus $ 24,069,124.39 Eagle $ 24,425,001.16 Herndon $ 23,682,893.00 Earnest Partners $ 13,349,809.82 NFJ/Allianz $ 16,118,131.65 AIM/Invesco $ 16,803,220.88 Wamco $ 23,498,324.24 Pimco $ 22,132,553.44 Checking account $ 2,291.25 TOTAL FUNDS $ 206,586,607.38 b. The Board received a copy of the Summary of Employer Contributions to the Police and Fire Retirement System for the 2014 tax year as of 9/26/14. The System has received $7,115,200.00 of the 2014/15 budget of $7,953,970.00, leaving an $838,770.00 balance. c. Benefit Register Listing as of October 1, 2014 from Comerica Bank showing 315 retirees/beneficiaries with a payout for October of $1,271,800.75 and a year-to-date of $13,809,314.56. d. The current Merrill Lynch Bond index for September 2014 is 2.2%. 10. BENEFITS & PLAN ADMINISTRATION a. Old Business 1. Abel/Noser Reports for August 2014 Abel/Noser has supplied the August 2014 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 $9,500.00 for actuarial and consulting services rendered for the third quarter 2014 ($2,700.00) and the 2014 GASB Statement 67 actuarial report ($6,800.00). 2. Disbursement to the City of Sterling Heights in the amount of $2,449.68 for accounting services rendered for the third quarter 2014. 3. Disbursement to Mark Wellhausen in the amount of $699.32 for travel expenses for the 2014 Fall MAPERS Conference in Acme, MI on September 14-16, 2014. 4. Disbursement to Randall Schwarb in the amount of $716.22 for travel expenses for the 2014 Fall MAPERS Conference in Acme, MI on September 14-16, 2014. 5. Disbursement to Merrill Lynch in the amount of $27,457.15 for the quarterly NFJ/Allianz account UMA fee for the fourth quarter 2014. 6. Disbursement to Merrill Lynch in the amount of $20,926.62 for the quarterly Earnest Partners account UMA fee for the fourth quarter 2014. 7. Disbursement to Merrill Lynch in the amount of $36,015.75 for the quarterly Herndon account UMA fee for the fourth quarter 2014. 8. Disbursement to Merrill Lynch in the amount of $37,062.10 for the quarterly Pimco account UMA fee for the fourth quarter 2014. 9. Disbursement to Merrill Lynch in the amount of $39,324.32 for the quarterly WAMCO account UMA fee for the fourth quarter 2014. 10. Disbursement to Merrill Lynch in the amount of $36,668.60 for the quarterly Winslow account UMA fee for the fourth quarter 2014. 11. Disbursement to Merrill Lynch in the amount of $31,764.39 for the Consults fee for the AIM/Invesco account for the fourth quarter 2014. 12. Disbursement to Merrill Lynch in the amount of $45,499.67 for the Consults fee for the Janus account for the fourth quarter 2014. 13. Disbursement to Merrill Lynch in the amount of $15,390.80 for the SPA fee for the Eagle account for the fourth quarter 2014. Motion by Schwarb, supported by Wellhausen, to approve the disbursements as presented. Ayes: All. The motion carried. 10. BENEFITS & PLAN ADMINISTRATION a. Old Business 2. Thomas McMullen – DROP retirement termination information – discussion Sergeant Thomas McMullen of the Police Department terminated his DROP retirement as of September 19, 2014. All required paperwork is on file in the Pension Office. Motion by Schwarb, supported by Wellhausen, to approve the disbursement for the regular pension and process the retirement certificate as submitted. Ayes: All. 3. Lisa Cairns (Rotter) – EDRO retirement resolution – discussion Lisa Cairns, Alternate Payee of retired Fire Captain Todd Rotter, has supplied the necessary paperwork to start receiving her monthly benefit as stipulated in the EDRO as of October 1, 2014. All required paperwork is on file in the Pension Office. After discussion, the following resolution was considered: L 14-10-16-1 RE: LISA CAIRNS (ROTTER) EDRO BENEFIT RESOLUTION 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 (EDRO), dated September 15, 2011, purporting to grant LISA CAIRNS (ROTTER) with certain rights and claims regarding Retirement System benefits normally payable to TODD ROTTER, who terminated employment on September 4, 2014, and WHEREAS, the Board, at its regular meeting of October 20, 2011, approved the Eligible Domestic Relations Order, dated September 15, 2011, wherein LISA CAIRNS (ROTTER), 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 WHEREAS, the benefits payable from the Defined Benefit Plan are subject to the terms of the September 15, 2011 EDRO, and accordingly, the former spouse, LISA CAIRNS (ROTTER), shall receive fifty (50%) per cent portion of the member’s Defined Benefit Plan benefits which has accrued from the date of marriage to April 12, 2011, and WHEREAS, the defined contribution plan division of benefits and said annuity withdrawal are subject to the terms of the September 15, 2011 EDRO and accordingly, the former spouse, LISA CAIRNS (ROTTER), shall receive fifty (50%) per cent portion of the member’s Defined Contribution Plan (annuity withdrawal account) which has accrued from the date of marriage to April 12, 2011, and THEREFORE, BE IT RESOLVED, that the Board hereby acknowledges receipt of the Eligible Domestic Relations Order, dated September 15, 2011, and shall pay pension benefits consistent with said Court Order, and further RESOLVED, that in accordance with the EDRO, LISA CAIRNS (ROTTER) shall be paid an annuity withdrawal (total lump sum distribution from the defined contribution plan) of $32,798.77, and a yearly regular retirement pay in the amount of $18,470.64 or monthly benefits of $1,539.22. That the Treasurer shall immediately calculate and pay LISA CAIRNS (ROTTER) the appropriate amount effective October 1, 2014, and further RESOLVED, that pension benefits, consistent with the elections herein and in accordance with the provisions of the September 15, 2011 EDRO, be paid to the former spouse, LISA CAIRNS (ROTTER). Motion by Wellhausen, supported by Schwarb, to approve the EDRO benefit resolution and disbursements for the monthly pension and annuity withdrawal. Ayes: All. The motion carried. 4. Actuarial information for GASB Statement 67 - discussion The actuarial information for GASB Statement 67 has been received from the actuary for the Board’s review. Ms. Varney stated that page 3 of the report will be revised and the actuary will charge an additional cost. Motion by Varney, supported by Wellhausen, to receive and file the report. Ayes: All. The motion carried. 5. Actuarial RFP update – discussion Legal Counsel reported to the Board that the RFP for actuarial services was sent out to five actuarial companies. Responses should start to come in within the next few weeks. 6. Investment Consultant update – discussion The Board briefly discussed this item. Motion by Varney, supported by Maleszyk, to hire Graystone Consulting – The Brice Group as the Board’s investment consultant, pending review of the contract by Legal Counsel. Ayes: Lamerato, Varney, Schwarb, Maleszyk. Nays: Wellhausen. The motion carried. 7. Large Cap Core update – discussion The Board will discuss further the three large cap core manager presentations with The Brice Group at the November 20th meeting and request updated performance through the third quarter. 8. Mark Johnson – partial DROP distribution - discussion Mark Johnson of the Police Department terminated his DROP retirement as of June 29, 2011. 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 disbursement for the partial DROP distribution as presented. Ayes: All. The motion carried. 11. TRUSTEE COMMENTS None. 12. ADJOURNMENT Motion by Maleszyk, supported by Wellhausen, to adjourn at 3:45 p.m. Ayes: All. The motion carried; the meeting is hereby adjourned. Mark Wellhausen Secretary