Minutes - 10/14/2015 - Police Pension Fund BoardVILLAGE OF OAK BROOK
BOARD OF TRUSTEES OF THE POLICE PENSION FUND - Minutes
October 14, 2015
UNOFFICIAL UNTIL APPROVED AS WRITTEN X
OR AS AMENDED BY BOARD OF TRUSTEES OF THE
POLICE PENSION FUND ON January 20, 2016
1. CALL TO ORDER:
The Regular Meeting of the Board of Trustees of the Oak Brook Police Pension Fund was
called to order by President Vel Torlo at 7:00 p.m. in the Upper Level Conference Room of the
Samuel E. Dean Board Room of the Butler Government Center, 1200 Oak Brook Road, Oak
Brook, Illinois.
2. ROLL CALL:
The roll was called with the following persons
PRESENT: President Vel Torlo, Vice President Alan Feldman, Secretary Edward Caspers,
Trustee Hitesh Patel, Trustee Ben Kadolph
ABSENT:
IN ATTENDANCE: Courtney Cervantes, Jeff Kowalczyk and Bill Lowery of Lowery Asset
Consulting, LLC, Bob Thompson of MB Financial, Finance Director/Treasurer Sharon Dangles,
Pension Clerk Rose Kane
3. ELECTION OF OFFICERS:
Pension Clerk Kane requested a motion from the floor for nominations for President.
Motion by Trustee Patel, seconded by Trustee Caspers, to nominate Vel Torlo for
President. VOICE VOTE: Motion carried.
Motion by Trustee Caspers, seconded by Trustee Patel, to elect Vel Torlo as President of
the Oak Brook Police Pension Fund Board of Trustees. VOICE VOTE: Motion carried.
President Torlo then opened up nominations for Vice President and Secretary.
Motion by Trustee Patel, seconded by Trustee Caspers, to nominate Alan Feldman for
Vice President. VOICE VOTE: Motion carried. Alan Feldman was elected Vice President
in one motion.
Motion by Trustee Kadolph, seconded by Vice President Feldman, to nominate Edward
Caspers for Secretary. VOICE VOTE: Motion carried. Edward Caspers was elected
Secretary in one motion.
4. PRESIDENT’S COMMENT: None presented.
5. APPROVAL OF MINUTES:
a. Approval of Special Meeting Minutes of August 20, 2015
Motion by Secretary Caspers, seconded by Trustee Kadolph, to approve the Minutes of
the August 20, 2015 Special Board Meeting as amended. VOICE VOTE: Motion carried.
6 CONSENT AGENDA:
All items on the Consent Agenda are considered to be routine in nature and will be enacted in
BOARD OF TRUSTEES OF THE POLICE PENSION FUND
Minutes Page 1 of 5 October 14, 2015
one motion.
a. Approval of expenditures for month ended June 30, 2015 in the amount of $223,864.89
b. Approval of expenditures for month ended July 31, 2015 in the amount of $211,011.78
c. Approval of expenditures for month ended August 31, 2015 in the amount of $196,239.84
d. Approval of The Mitchell Group invoices, dated October 3, 2014, January 7, 2015, April 7,
2015 and July 6, 2015, in the total amount of $8,602.69
e. Approval of Lowery Asset Consulting, LLC's invoice in the amount of $7,000.00, dated April
15, 2015, for First Quarter, 2015 services
f. Approval of IDOI Compliance Fee invoice #F76509 in the amount of $6,516.81
g. Approval of Lauterbach & Amen, LLP’s invoices for professional services in: March, April and
June, 2015, and year end work papers and IDOI report for FYE December 31, 2014 in the
total amount of $5,375.00
h. Approval of Mesirow Financial invoice in the amount of $3,712.00, dated July 7, 2015 for
Fiduciary Liability Insurance
i. Approval of Reimbursement to Pension Clerk Kane’s for Fall Pension Conference
registrations and postage in the total amount of $985.31
j. Approval of Reimer & Karlson, LLC’s invoices, dated July 15, 2015 and August 9, 2015, in
the total amount of $270.49
Motion by Trustee Kadolph, seconded by Secretary Caspers, to approve the Consent
Agenda.
ROLL CALL:
Ayes: 5 – Vice President Feldman, Secretary Caspers, Trustee Patel, Trustee Kadolph,
President Torlo
Nays: 0 – None
Absent: 0 – Motion carried.
7. ITEMS REMOVED FROM CONSENT AGENDA – None presented.
8. UNFINISHED BUSINESS
a. Approval of: Resolution OBPDPEN-TR-R-2015-1, A Resolution Delegating The Treasurer’s
Signatory Authority For The Oak Brook Police Pension Fund
There was a brief explanation by Finance Director/Treasurer Dangles and Pension Clerk Kane.
Motion by Trustee Patel, seconded by Secretary Caspers, to approve Resolution
OBPDPEN-TR-R-2015-1. VOICE VOTE: Motion carried.
b. Approval of Response to IDOI’s Compliance Audit and Examination, dated August 21, 2015
Motion by Secretary Caspers, seconded by Trustee Patel, to approve the Response to
IDOI’s Compliance Audit and Examination, dated August 21, 2015.
VOICE VOTE: Motion carried.
9. NEW BUSINESS
a. Lowery Asset Consulting, LLC Report for Third Quarter, 2015
Per Section I. Executive Summary of the Report:
The Fund investment assets at MB Financial had a value of approximately
$30,888,877 as of September 30, 2015. The current allocation is 57.6% Equity and
42.4% Fixed Income and Cash as defined by the Illinois State Statute. The current
portfolio allocation:
BOARD OF TRUSTEES OF THE POLICE PENSION FUND
Minutes Page 2 of 5 October 14, 2015
42.4% Fixed Income (includes PIMCO Mutual Fund)
25.4% S&P500
6.4% Russell 2000
17.2% MSCI EAFE
3.5% S&P Nat Resources
5.1% Wilshire REIT
Ms. Cervantes mentioned that the DF Dent position had been liquidated per approval at the last
meeting, and the proceeds were split between PrimeCap Odyssey Stock and T. Rowe Price,
except for $10,000.00 to cover MB Financial’s quarterly fees in the mutual fund account.
Mr. Lowery reported that there was a lot of market activity in the third quarter and stated that the
Fund (page 8 of Lowery’s Report) was down about 4.8% for the quarter and 3.29% year-to-
date. He discussed a number of market events in the third quarter listed on page 6 of the
“Quarterly Observations – Q3 2015” hand-out and mentioned specific global trading, etc. He
discussed that Mitchell Group Energy is up about 16% for the quarter-to-date (page 2 of the
“Manager Performance by Strategy” hand-out). Discussion ensued regarding stocks and bonds’
duration.
Mr. Klein provided information on the bond market and duration of bonds. He discussed a
sensitivity analysis MB is doing for the Oak Brook Firefighters Pension bond portfolio and
referred to the 12-Month Fixed Income Return Projections graph on page 9 of MB’s report.
b. MB Financial Investment Management Performance Report on Third Quarter, 2015
Per page 11 of MB’s report, the Portfolio Composition as of September 30, 2015:
Total Fund: 11,926,995
Fixed Income: 11,753,941
Cash & Equiv: 173,058
Mr. Klein talked about building the bond portfolio for safety and security. Mr. Klein then referred
to the GDP, Inflation, Labor-U.S. and Developed Economies’ graph and the Global 10-Year
Government Bond Yields’ graph on page 4 of MB’s report. He mentioned that on the S&P 500
Sectors, 12-Month Returns’ (Price) graph on page 6 of MB’s report, Consumer Discretionary
Stocks (Retail) were one of the lone standouts for this period.
Mr. Klein suggested going up to 4% in bond duration, but Mr. Lowery recommending staying at
3.75%. Discussion ensued regarding status of European countries and Mexico.
c. Approval of Investment Transactions for Third Quarter, 2015
Motion by President Torlo, seconded by Trustee Kadolph, to approve the Investment
Transactions for Third Quarter, 2015.
ROLL CALL:
Ayes: 5 – President Torlo, Vice President Feldman Secretary Caspers, Trustee Patel, Trustee
Kadolph,
Nays: 0 – None
Absent: 0 – Motion carried.
Lowery Asset Consulting and MB Financial representatives exited the meeting at approximately
at 8:00 p.m.
d. Approval of Municipal Compliance Report for FY2014
BOARD OF TRUSTEES OF THE POLICE PENSION FUND
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Motion by Secretary Caspers, seconded by Trustee Kadolph, to approve the Municipal
Compliance Report FY2014. VOICE VOTE: Motion carried.
e. Approval of Qildro and Calculation Order for Paul Stadwiser
Brief discussion ensued regarding spousal benefits.
Motion by Secretary Caspers, seconded by Trustee Kadolph, to approve the Qildro and
Calculation Order for Paul Stadwiser in accordance with the Judge’s Order.
ROLL CALL:
Ayes: 5 – Secretary Caspers, Trustee Patel, Trustee Kadolph, President Torlo, Vice President
Feldman
Nays: 0 – None
Absent: 0 – Motion carried.
f. Discussion regarding custodial and investment consultants
Comments were made regarding the custodial fees being charged and agreements with current
custodial and investment consultants. Discussion regarding going out for Request for Proposal
(RFP) and which vendors to send to and what should be included in the RFP. It was suggested
that it is important for the consultant to understand what risk the Board wants to pursue and to
provide suggestions. Responses to the last RFP were discussed.
Consensus to go out for RFP. Discussion continued regarding what should be included in the
RFP, to leave it open-ended regarding custody and equity. The history of investment
consultants was discussed and reasons for the changes in 2008.
Pension Clerk Kane stated that she would pull the last RFP responses, but it was agreed to
send RFPs to: Marquette, Taiber & Kosmala, but not to Credit Suisse, Fidelity, and Vanguard. It
was suggested that the RFP could also be sent to Sawyer, Falduto. It was mentioned that the
Firefighters Pension Board have gone out for RFP. Pension Clerk Kane mentioned that the
Village Attorneys have recommended that all RFPs should include a contract.
Motion by Secretary Caspers, seconded by Trustee Kadolph, to revise the previous RFP
and send out for investment and custodial consultants.
Consensus to start the process, send out to the Board for review and then to the Board’s
attorney along with the existing contracts, and then discuss at the January meeting
ROLL CALL:
Ayes: 5 – Secretary Caspers, Trustee Patel, Trustee Kadolph, President Torlo, Vice President
Feldman
Nays: 0 – None
Absent: 0 – Motion carried.
Discussion continued regarding the current market.
Finance Director/Treasurer Dangles discussed reasons that the Village has gone out for RFP
for actuarial services and Nyhart has been selected. Discussion ensued.
10. INFORMATION & UPDATES
a. Scheduling of first quarterly meeting in 2016:
Consensus to meet January 20, 2016.
BOARD OF TRUSTEES OF THE POLICE PENSION FUND
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11. ADJOURNMENT:
Motion by Secretary Caspers, seconded by Trustee Patel, to adjourn the Board of
Trustees of the Police Pension Fund meeting at 8:49 p.m. VOICE VOTE: Motion carried.
ATTEST:
Edward J. Caspers /s/
Edward J. Caspers, Secretary
Board of Trustees of the Police Pension Fund
BOARD OF TRUSTEES OF THE POLICE PENSION FUND
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