Police & Fire Retirement Board

REGULAR MEETING MINUTES OF THE STERLING HEIGHTS POLICE AND FIRE RETIREMENT SYSTEM, ACT 345 JULY 16, 2015 FIRE DEPARTMENT CONFERENCE ROOM 41625 RYAN ROAD STERLING HEIGHTS, MI 48314 1. The regular meeting of the Police and Fire Retirement System was called to order by Chairman Schwarb at 3:37 p.m. 2. Board Members present: Wellhausen, Schwarb, Maleszyk, Varney. Absent: Lamerato (excused). Also present: Tom Michaud, Legal Counsel (arrived at 3:40); 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: Wellhausen, Schwarb, Maleszyk, Varney. Absent: Lamerato. The motion carried. Motion by Wellhausen, supported by Schwarb, to approve the regular agenda as presented. Ayes: Wellhausen, Schwarb, Maleszyk, Varney. Absent: Lamerato. The motion carried. Regular Meeting Minutes – July 16, 2015 Page Two 4. APPROVAL OF MINUTES No corrections were made to the draft minutes of the regular meeting of June 18, 2015. Motion by Schwarb, supported by Varney, to approve the minutes as presented. Ayes: Wellhausen, Schwarb, Maleszyk, Varney. Absent: Lamerato. The motion carried; the minutes of the regular meeting of June 18, 2015 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 from Intercontinental dated July 1, 2015 re: Seventeenth Amendment to Limited Liability Company Agreement of U.S. Real Estate Investment Fund, LLC. b. Correspondence to Morgan Stanley Graystone Consulting re: rebalance of the large cap value equity. c. Other correspondence received from: 1. Herndon Capital – Privacy Policy and Procedure 2. Morgan Stanley – market value weekly updates 3. Pomerantz LLP Monitor newsletter 4. UNC Plan Management Conference d. Magazines received: 1.Institutional Investor for July 2015 2. Pensions & Investments for June 29 and July 13, 2015. 8. BILLS AND EXPENDITURES c. Checking Account Summary Beginning Balance $ 7,457.29 6/01/15 Regular Meeting Minutes – July 16, 2015 Page Three CONSENT AGENDA 8. BILLS AND EXPENDITURES c. Checking Account Summary – cont. Subtractions (7) $ 2,458.50 1. 6/25 Check 1973 24.44 City of S.H. – printer charges  2. 6/24 Check 1974 250.00 ND – postage reimbursement 3. 6/24 Check 1975 255.40 ND – postage reimbursement 4. 6/25 Check 1976 27.47 AT & T phone bill – 6/16/15 5. 6/05 Check 5333 910.73 Contract Payment Nancy Duyck 6. 6/08 Check 5334 79.74 Contract fee – Gurin & Gurin 7. 6/19 Check 5335 910.72 Contract Payment Nancy Duyck Electronic withdrawals (4) $1,318.40 1. 6/08 461.54 IRA contribution 2. 6/10 376.25 IRS Fed. tax w/h 3. 6/22 104.34 Michigan St. tax w/h 4. 6/24 376.27 IRS Fed. tax w/h Ending Balance $3,680.39 6/30/15 d. Transmittal of Checks 1. $286.17 received from Karyn Choate for one-half of the fee for an EDRO actuarial calculation. 9. FUNDS MANAGEMENT a. The current value of funds as of June 30, 2015 is detailed below: Clearing account $ 2,663,884.45 Intercontinental $ 7,594,716.59 Winslow $ 15,895,807.26 Janus $ 16,351,152.48 Eagle $ 10,854,421.41 Herndon $ 20,923,387.53 Earnest Partners $ 14,611,127.93 NFJ/Allianz $ 15,797,588.35 AIM/Invesco $ 17,278,306.79 Western $ 26,809,877.88 Met West $ 25,207,297.51 London Co. $ 31,004,860.86 MS Cash $ 1,263.00 Checking account $ 3,680.39 TOTAL FUNDS $ 204,997,372.43 Regular Meeting Minutes – July 16, 2015 Page Four CONSENT AGENDA 9. FUNDS MANAGEMENT - cont. - 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 6/30/15. The System has received $7,953,970.00 of the 2014/15 budget of $7,953,970.00, leaving a zero balance. The Board received a copy of the Summary of Employer Contributions to the Police and Fire Retirement System for the 2015 tax year as of 7/14/15. The System has received $414,900.00 of the 2015/16 budget of $7,986,312.00, leaving a $7,571,412.00 balance. c. Benefit Register Listing as of July 1, 2015 from Comerica Bank showing 332 retirees/beneficiaries with a payout for July of $1,354,003.69 and a year-to-date of $10,154,569.31. d. The current Merrill Lynch Bond index for June 2015 is 2.22%. 10. BENEFITS & PLAN ADMINISTRATION a. Old Business No Old Business. REGULAR AGENDA 8. BILLS AND EXPENDITURES a. Disbursements other than retiree benefit payments (bills) 1. Disbursement to Software Systems & Products Corporation in the amount of $2,090.00 for custom modifications to the Membership Tracking Database. 2. Disbursement to Rodwan Consulting Company in the amount of $2,700 for actuarial and consulting services rendered for the second quarter 2015. 3. Disbursement to Comerica Bank in the total amount of $1,827.60 for services rendered to the Clearing and Intercontinental accounts for the second quarter 2015. 4. Disbursement to Morgan Stanley in the total amount of $274,365.21 for investment management fees for the second quarter 2015 for all ten accounts. 5. Disbursement to the City of Sterling Heights in the total amount of $581.28 for accounting services rendered for the second quarter 2015. Regular Meeting Minutes – July 16, 2015 Page Five REGULAR AGENDA 8. BILLS AND EXPENDITURES a. Disbursements other than retiree benefit payments (bills) – cont. Motion by Wellhausen, supported by Schwarb, to approve the bills as presented. Ayes: Wellhausen, Schwarb, Maleszyk, Varney. Absent: Lamerato. The motion carried. b. Disbursement to retirees/members other than monthly benefit payments 1. Mark Schroeder – partial DROP distribution - discussion Mark Schroeder of the Fire Department terminated his DROP retirement as of April 17, 2015. He requested a partial distribution from his DROP account. All required paperwork is on file in the Pension Office. Motion by Wellhausen, supported by Schwarb, to approve the partial DROP distribution as presented. Ayes: Wellhausen, Schwarb, Maleszyk, Varney. Absent: Lamerato. The motion carried. 10. BENEFITS & PLAN ADMINISTRATION a. New Business 1. Jeffrey Cline – DROP retirement termination - discussion Lt. Jeffrey Cline of the Fire Department terminated his DROP retirement as of June 18, 2015. All required paperwork is on file in the Pension Office. Motion by Wellhausen, supported by Schwarb, to approve the retirement disbursement and process the retirement certificate as presented. Ayes: Wellhausen, Schwarb, Maleszyk, Varney. Absent: Lamerato. The motion carried. Regular Meeting Minutes – July 16, 2015 Page Six REGULAR AGENDA 10. BENEFITS & PLAN ADMINISTRATION a. New Business 2. Christopher Parmentier – DROP retirement termination - discussion FEO Christopher Parmentier of the Fire Department terminated his DROP retirement as of June 18, 2015. All required paperwork is on file in the Pension Office. Motion by Wellhausen, supported by Schwarb, to approve the retirement disbursement and process the retirement certificate as presented. Ayes: Wellhausen, Schwarb, Maleszyk, Varney. Absent: Lamerato. The motion carried. 3. Anthony Roebuck – DROP retirement termination - discussion Sgt. Anthony Roebuck of the Police Department terminated his DROP retirement as of June 18, 2015. He also 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 retirement, annuity withdrawal and partial DROP disbursements and process the retirement certificate as presented. Ayes: Wellhausen, Schwarb, Maleszyk, Varney. Absent: Lamerato. The motion carried. 4. Karyn Choate – EDRO benefit resolution - discussion  Karyn Choate, Alternate Payee of retired Battalion Chief Gary Choate, has supplied the necessary paperwork to start receiving her monthly benefit. All required paperwork is on file in the Pension Office. After discussion, the following resolution was considered: Regular Meeting Minutes – July 16, 2015 Page Seven REGULAR AGENDA 10. BENEFITS & PLAN ADMINISTRATION a. New Business 4. Karyn Choate – EDRO benefit resolution – discussion – cont. L 15-7-16-1 Re: KARYN CHOATE 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 (EDRO), dated April 27, 2012, purporting to grant KARYN CHOATE with certain rights and claims regarding the Retirement System benefit normally payable to GARY CHOATE, who retired as of June 12, 2015, and WHEREAS, the Board, at its regular meeting of May 17, 2012, approved the Eligible Domestic Relations Order, dated April 27, 2012, wherein KARYN CHOATE, the former spouse of the member, was granted certain rights to the Defined Benefit Plan benefit of the aforesaid member, and RESOLVED, that the Board hereby acknowledges receipt of the Eligible Domestic Relations Order, dated April 27, 2012, and shall pay pension benefits consistent with said Court Order, and further RESOLVED, KARYN CHOATE has elected to receive her actuarial reduced benefit over her lifetime, and further RESOLVED, that in accordance with the EDRO, KARYN CHOATE shall be paid a yearly regular retirement pay in the amount of $36,890.52 or monthly benefits of $3,074.21. That the Treasurer shall immediately calculate and pay KARYN CHOATE the appropriate amount as of July 1, 2015, and further RESOLVED, that pension benefits, consistent with the elections herein and in accordance with the provisions of the April 27, 2012 EDRO, be paid to the former spouse, KARYN CHOATE. Regular Meeting Minutes – July 16, 2015 Page Eight REGULAR AGENDA 10. BENEFITS & PLAN ADMINISTRATION a. New Business 4. Karyn Choate – EDRO benefit resolution – discussion – cont. Motion by Wellhausen, supported by Schwarb, to adopt the resolution as presented and process the disbursement. Ayes: Wellhausen, Schwarb, Maleszyk, Varney. Absent: Lamerato. The motion carried. 5. Randall Schwarb – Application for military buyback - 2 years and 2 months - discussion Randall Schwarb of the Police Department has submitted an application for buyback of military time as noted. All required paperwork is on file in the Pension Office. Motion by Wellhausen, supported by Varney, to approve the military buyback as presented and process the 457 transfer. Ayes: Wellhausen, Maleszyk, Varney. Absent: Lamerato. Abstain: Schwarb. The motion carried. 6. Pension Binder – update - discussion The annual Pen-mast reports for active employees were processed as of June 30, 2015. The Board considered the draft summary annual report for the Pension Binder. Motion by Schwarb, supported by Wellhausen, to approve the summary annual report for the pension binder as presented. Ayes: Wellhausen, Schwarb, Maleszyk, Varney. Absent: Lamerato. The motion carried. Regular Meeting Minutes – July 16, 2015 Page Nine REGULAR AGENDA 10. BENEFITS & PLAN ADMINISTRATION a. New Business 7. 2015 Fall MAPERS Conference - discussion The Board has received registration information for the 2015 MAPERS Fall Conference. It is scheduled for September 27-29, 2015 at the Grand Traverse  Resort in Acme, MI. Four members are budgeted to attend this conference. Lamerato requested attendance through email. Motion by Wellhausen, supported by Schwarb, to register four members for the 2015 Fall MAPERS conference. Ayes: Wellhausen, Schwarb, Maleszyk, Varney. Absent: Lamerato. The motion carried. Varney will not be attending the conference. 8. Account transfer for August 2015 benefit payments – discussion As of July 13, 2015, the Clearing Account had a balance of $481,812.00. An additional $1,150,000.00 is needed for the August 1, 2015 pension benefit payments and bills from the Clearing Account. The Brice Group has forwarded an e-mail that the additional amount needed should be taken from the London ($575,000.00), Janus ($287,500.00), and Winslow ($287,500.00) accounts, based on the asset allocation targets. Motion by Schwarb, supported by Wellhausen, to approve the transfer of the appropriate amount of funds from the Winslow, Janus, and London accounts, based on the asset allocation targets, to provide for pension benefit payments and other disbursements on August 1, 2015. Ayes: Wellhausen, Schwarb, Maleszyk, Varney. Absent: Lamerato. The motion carried. 11. TRUSTEE COMMENTS The Board discussed sending the agenda package electronically instead of a paper copy. Regular Meeting Minutes – July 16, 2015 Page Ten 12. ADJOURNMENT Motion by Wellhausen, supported by Maleszyk, to adjourn at 3:50 p.m. Ayes: Wellhausen, Schwarb, Maleszyk, Varney. Absent: Lamerato. The motion carried; the meeting is hereby adjourned. Mark Wellhausen Secretary