Police & Fire Retirement Board

REGULAR MEETING MINUTES OF THE STERLING HEIGHTS POLICE AND FIRE RETIREMENT SYSTEM, ACT 345 OCTOBER 8, 2015 FIRE DEPARTMENT CONFERENCE ROOM 41625 RYAN ROAD STERLING HEIGHTS, MI 48314 1. Chairman Schwarb called the regular meeting of the Police and Fire Retirement System to order at 3:40 p.m. 2. Board Members Present: Wellhausen, Schwarb, Maleszyk, Varney. Absent: Lamerato (excused). Also present: Tim Brice and Rebecca Wolfe, representing The Brice Group/Morgan Stanley Graystone Consulting; Nancy Wigton and Jennifer Dunne representing Cambiar Investors; David Hissey and Foster Corwith representing Causeway Capital Management; 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: 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 – October 8, 2015 Page Two 4. APPROVAL OF MINUTES No corrections were made to the draft minutes of the regular meeting of September 17, 2015. Motion by Schwarb, supported by Maleszyk, to approve the minutes as presented. Ayes: Wellhausen, Schwarb, Maleszyk, Varney. Absent: Lamerato. The motion carried. 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 new business as they were considered. CONSENT AGENDA 7. CORRESPONDENCE a. Other correspondence received from: 1. Morgan Stanley – market value weekly updates b. Magazines received: 1.Institutional Investor for October 2015 2. Pensions & Investments for September 21 and October 5, 2015. 8. BILLS AND EXPENDITURES c. Checking Account Summary Beginning Balance 3,699.52 9/01/15 Additions (1) 1. 9/04 $ 5,000.00 Subtractions (4) $ 1,973.46 1. 9/29 Check 1984 29.61 AT & T phone bill – 9/16/15 2. 9/11 Check 5343 932.04 Contract Payment Nancy Duyck 3. 9/15 Check 5344 79.76 Contract fee – Gurin & Gurin 4. 9/25 Check 5345 932.05 Contract Payment Nancy Duyck Regular Meeting Minutes – October 8, 2015 Page Three CONSENT AGENDA 8. BILLS AND EXPENDITURES c. Checking Account Summary – cont. Electronic withdrawals (5) $1,723.62  1. 9/02 385.08 IRS Fed. tax w/h 2. 9/14 461.54 IRA contribution 3. 9/16 385.10 IRS Fed. tax w/h 4. 9/21 106.82 Michigan St. tax w/h 5. 9/30 385.08 IRS Fed. tax w/h Ending Balance $5,002.44 9/30/15 d. Transmittal of Checks 1. There were no checks received this month. 9. FUNDS MANAGEMENT a. The current value of funds as of Sept 30, 2015 is detailed below: Clearing account $ 8,106,447.87 Intercontinental $ 5,218,458.28 Winslow $ 14,646,125.66 Janus $ 15,465,525.77 Eagle $ 14,768,926.85 Herndon $ 14,434,047.58 Earnest Partners $ 13,015,090.11 NFJ/Allianz $ 13,366,732.38 AIM/Invesco $ 15,420,595.49 Western $ 27,040,410.29 Met West $ 25,310,703.36 London Co. $ 28,489,975.77 MS Cash $ 479.00 Checking account $ 5,002.44 TOTAL FUNDS $ 195,288,520.85 b. 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 9/28/15. The System has received $7,176,100.00 of the 2015/16 budget of $7,986,312.00, leaving a $810,212.00 balance. Regular Meeting Minutes – October 8, 2015 Page Four CONSENT AGENDA 9. FUNDS MANAGEMENT – cont. c. Benefit Register Listing as of October 1, 2015 from Comerica Bank showing 336 retirees/beneficiaries with a payout for October of $1,403,229.65 and a year-to-date of $15,488,077.66. d. The current Merrill Lynch Bond index for September 2015 is 2.17%. 10. BENEFITS & PLAN ADMINISTRATION a. Old Business 1. None. 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 $950.00 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 third quarter 2015. 3. Disbursement to Mark Wellhausen in the amount of $941.02 for travel expenses for the 2015 Fall MAPERS Conference in Acme, MI on September 27-29, 2015. 4. Disbursement to Robert Maleszyk in the amount of $716.28 for travel expenses for the 2015 Fall MAPERS Conference in Acme, MI on September 27-29, 2015. 5. Disbursement to Randy Schwarb in the amount of $717.22 for travel expenses for the 2015 Fall MAPERS Conference in Acme, MI on September 27-29, 2015. 6. Disbursement to the City of Sterling Heights in the total amount of $3,390.80 for accounting services rendered for the third quarter 2015. Motion by Schwarb, supported by Varney, to approve the bills as presented. Regular Meeting Minutes - October 8, 2015 Page Five REGULAR AGENDA 8. BILLS AND EXPENDITURES – cont. a. Disbursements other than retiree benefit payments (bills) – cont. Ayes: Wellhausen, Schwarb, Maleszyk, Varney. Absent: Lamerato. The motion carried. b. Disbursements to retirees/members other than monthly benefit payments 1. Stephen Kovalcik – partial DROP distribution - discussion Chief Stephen Kovalcik of the Fire Department terminated his DROP retirement as of July 29, 2011. 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 disbursement as presented. Ayes: Wellhausen, Schwarb, Maleszyk, Varney. Absent: Lamerato. The motion carried. 9. FUNDS MANAGEMENT The following item was done at the beginning of the meeting to correspond with the scheduled interview times. e. International equity manager candidates - interviews Cambiar Investors – 3:30 (conference call) Nancy Wigton was in attendance and Jennifer Dunne participated via a conference call representing Cambiar Investors. They presented a detailed report regarding international equity and their philosophy and style. They reviewed the written report in detail and also responded to individual Board Member’s questions. Causeway Capital Management – 4:00 (conference call) David Hissey was in attendance and Foster Corwith participated via a conference call representing Causeway Capital Management. They presented a detailed report regarding international equity and their philosophy and style. Regular Meeting Minutes – October 8, 2015 Page Six REGULAR AGENDA 9. FUNDS MANAGEMENT e. International equity manager candidates – interviews – cont. They reviewed the written report in detail and also responded to individual Board Member’s questions. After discussion, the following motion was made: Motion by Wellhausen, supported by Varney, to hire Cambiar Investors and terminate NFJ/Allianz and move all funds from NFJ/Allianz to Cambiar. Ayes: Wellhausen, Schwarb, Maleszyk, Varney. Absent: Lamerato. The motion carried. Mr. Brice discussed with the Board the fee payment timing process with Morgan Stanley/Graystone Consulting. Currently invoices are received at the end of the quarter. Due to the timing of the annual audit and payment of invoices, the City is requesting invoices be sent at the beginning of the quarter. Motion by Varney, supported by Wellhausen, to table this item until the next regular meeting. Ayes: Wellhausen, Schwarb, Maleszyk, Varney. Absent: Lamerato. The motion carried. 10. BENEFITS & PLAN ADMINISTRATION a. New Business 1. Kevin Fergerson – EDRO resolution – discussion  The Board is in receipt of an Eligible Domestic Relation Order dated September 8, 2015 which purports to grant Alternate Payees, Tonya Fergerson, part of the monthly pension benefit normally payable to Kevin Fergerson. Legal Counsel has opined that the EDRO is consistent with the provisions of the Retirement System and applicable law. After discussion, the following resolution was considered: Regular Meeting Minutes – October 8, 2015 Page Seven REGULAR AGENDA 10. BENEFITS & PLAN ADMINISTRATION a. New Business 1. Kevin Fergerson – EDRO resolution – discussion – cont. L 15-10-8-1 RE: Tonya Y. Fergerson vs Kevin E. Fergerson Wayne County Circuit Court Case No. 12-105314-DM WHEREAS, the Board of Trustees is in receipt of an Eligible Domestic Relations Order (EDRO) dated September 8, 2015 12, 2015, wherein Tonya Y. Fergerson, the Alternate Payee, is awarded certain rights to the retirement benefits of Kevin E. Fergerson, the Participant, and WHEREAS, the Alternate Payee is entitled to claim a portion of the Participant’s retirement benefit from the Defined Benefit Plan and the Defined Contribution Plan, and WHEREAS, the payments from the plan to the Alternate Payee of the Participant’s benefits shall begin when the Participant commences benefits from the Retirement System, unless the Alternate Payee elects to receive benefits at any time after the Participant reaches his earliest retirement date, but not later than when the Participant actually commences benefits, and WHEREAS, the Board’s policy is to require that the cost for the actuary’s calculations are to be borne by the parties to the domestic relations proceedings, and the order provides that the Participant and the Alternate Payee shall be equally responsible for any and all additional costs for actuarial services, and WHEREAS, said matter has been discussed with Legal Counsel who has opined that the applicable terms of said court order are consistent with the provisions of the Retirement System and applicable law including Public Act 46 of 1991 (MCLA 38.1701) as amended, therefore be it RESOLVED, that the Board of Trustees acknowledges receipt of said court order, will pay pension benefits consistent with said order subject to an application being filed by either the Participant or Alternate Payee seeking payment, and further RESOLVED, that upon application of either the Alternate Payee or the Participant, this file be forwarded to the Board’s actuary for calculation of the benefits, and further Regular Meeting Minutes – October 8, 2015 Page Eight REGULAR AGENDA 10. BENEFITS & PLAN ADMINISTRATION a. New Business 1. Kevin Fergerson – EDRO resolution – discussion – cont. RESOLVED, that a copy of this resolution be immediately attached as the top sheet of the Participant’s pension file and other appropriate records be kept for the Retirement System relative to this matter, and further RESOLVED, that copies of this resolution be sent to Kevin E. Fergerson, the Participant; Tonya Y. Fergerson, the Alternate Payee; and the Board’s actuary. Motion by Wellhausen, supported by Schwarb, to adopt the resolution as presented. Ayes: Wellhausen, Schwarb, Maleszyk, Varney. Absent: Lamerato. The motion carried; the resolution is hereby adopted. 2. Jason Cybulski – refund of contributions – discussion Former vested Fire Fighter Jason Cybulski has requested a refund of contributions thereby forfeiting his deferred pension benefit. Waivers and the appropriate forms have been received from Mr. Cybulski and Alternate Payee, Danielle Cybulski. Motion by Wellhausen, supported by Schwarb, to approve the refund of contributions to Jason Cybulski and Alternate Payee, Danielle Cybulski. Ayes: Wellhausen, Schwarb, Maleszyk, Varney. Absent: Lamerato. The motion carried. 3. Antoinette Fett – duty disability retirement – discussion The actuarial report for the duty disability has been received. All required paperwork is on file in the Pension Office. After discussion, the following motion was considered: Regular Meeting Minutes – October 8, 2015 Page Nine REGULAR AGENDA 10. BENEFITS & PLAN ADMINISTRATION a. New Business 3. Antoinette Fett – duty disability retirement – discussion – cont. Motion by Schwarb, supported by Wellhausen, to approve the duty disability monthly pension benefit of $3,601.36 with an annuity withdrawal of $102,607.71,  with the offset for worker’s compensation received after the retirement date, as presented. Ayes: Wellhausen, Schwarb, Maleszyk, Varney. Absent: Lamerato. The motion carried. 11. TRUSTEE COMMENTS Congratulations were made to Mr. Lamerato for being elected to the MAPERS Board. Board Members that attended the Fall MAPERS conference reported that they received actuarial and investment information and that the conference was beneficial. Mr. Wellhausen reported that the June 30, 2015 actuarial report has been received and Rodwan Consulting would be requested to attend the November 19th regular meeting to present the report. 12. ADJOURNMENT Motion by Wellhausen, supported by Maleszyk, to adjourn at 5:34 p.m. Ayes: Wellhausen, Schwarb, Maleszyk, Varney. Absent: Lamerato. The motion carried; the meeting is hereby adjourned. Mark Wellhausen Secretary