Minutes - 01/24/2007 - Firefighter's Pension Fund BoardMINUTES OF THE JANUARY 24, 2007 REGULAR
MEETING OF THE BOARD OF TRUSTEES OF THE
OAK BROOK FIREFIGHTERS PENSION FUND
APPROVED AS WRITTEN ON APRIL 23, 2007.
1. CALL TO ORDER
Secretary Fagan requested a motion from the floor to appoint a Temporary
Chairman in the absence of President Erickson.
Motion by Trustee Schlindwein, seconded by Trustee Langlois, to appoint
Secretary Fagan as the Temporary Chairman of the meeting in the absence of
President Erickson. VOICE VOTE: Motion carried.
The Regular Meeting of the Board of Trustees of the Oak Brook Firefighters
Pension Fund was called to order by Chairman Fagan at 9:10 a.m. in the Upper
Level Conference Room of the Butler Government Center, 1200 Oak Brook
Road, Oak Brook, Illinois.
2. ROLL CALL
Recording Secretary Gonnella called the roll with the following persons
PRESENT: Secretary John Fagan, Trustees Scott Harris, Darrell J. Langlois and
Timothy Schlindwein.
ABSENT: President Erickson.
IN ATTENDANCE: Brian Speers, Merrill Lynch; Executive Vice President
Tom Sawyer, MB Financial; Actuary Timothy Sharpe and Accountant Sharon
Dangles.
3. APPROVAL OF MINUTES
a. Approval of Regular Meeting Minutes of October 25, 2006
Trustee Schlindwein noted a correction on page 6, third paragraph to read as
follows: "Trustee Harris asked if the Actuary could also come to a special
meeting when the Board meets with Attorney Reimer to discuss his position
sitting on the Board in the Garrigan disability hearing."
Motion by Chairman Fagan, seconded by Trustee Langlois, to approve the
Minutes of the October 25, 2006 Regular Meeting as amended. VOICE VOTE:
Motion carried.
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4. CONSENT AGENDA
All items on the Consent Agenda are considered to be routine in nature and will
be enacted in one motion.
Trustee Schlindwein noted the gaps in the check numbers. Trustee Langlois
responded that he will investigate this further and e -mail the Board an
explanation of this. He recommended approving the bills as presented.
Motion by Trustee Harris, seconded by Trustee Langlois, to approve the
Consent Agenda and authorize expenditures as presented. ROLL CALL
VOTE:
Ayes: 4 - Secretary Fagan, Trustees Harris, Langlois and Schlindwein.
Nays: 0 - None.
Absent: 1 - President Erickson. Motion carried.
a. Approval of September 1 -30, 2006 checks #3301 -3308 and #6573 -6594 in
the total amount of $97,867.18
b. Approval of October 1 -31, 2006 checks #3321 -3328 and #6596 -6617 in the
total amount of $98,535.42
c. Approval of November 1 -30, 2006 checks #3332 -3339 and #6619 -6640 in
the total amount of $96,825.18
d. Approval of December 1 -31, 2006 checks #3352 -3359 and #6642 -6663 in
the total amount of $99,371.23
e. Approval of the Pension Clerk's hours for the months of September through
December, 2006 in the total amount of $499.65
f. Approval of INSPE Associates, Ltd. Invoices in the total amount of
$3,720.00
5. ITEMS REMOVED FROM THE CONSENT AGENDA — None presented.
6. UNFINISHED BUSINESS —None presented.
7 NEW BUSINESS
a. Discussion of Actuarial Study
Trustee Langlois introduced Actuary Timothy Sharpe and indicated that he
has been the Actuary for approximately ten years for the funds. Mr. Sharpe
explained to the Board of Trustees the preliminary actuarial results of The
Fund. He indicated that the investment return of The Fund is 9.44 %, with an
annual payroll increase of 5.0 %, with one new member to The Fund and one
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7. a.
disability. The percent funded increased from 77.0% to 78.8 %. The
Village's required contributions increased from $577,661 to $584,714 and
the percentage of contributions decreased from 23.68% to 22.81%. The
assumptions used for the Study are a 7.5% investment return and 5.25%
salary increase. The revenue to The Fund includes the firefighter's
contributions, the investment return and the Village contributions.
Finance Director Langlois noted that the State of Illinois has made some
significant liability increases in pension benefits which have reduced the
funding of pension funds. He recommended that the Board direct the
Actuary to complete the Actuarial Study of The Fund with the assumptions
as presented.
Secretary Fagan asked what affect the Sudan Act would have on the
investments of The Fund. Mr. Sawyer indicated that an injunction should be
in the next two weeks against this Act and wait until this happens to
determine how to proceed. Trustee Langlois indicated that he does not
believe the 7.5% rate of return should be changed as he does not believe the
Sudan issue will affect the rate of return on the long term performance of The
Fund as injunctive relief may be coming soon with this issue. Secretary
Fagan indicated that he would rather recommend a 7.25% rate of return
assumption due to the concern he has with this issue.
Trustee Schlindwein asked what the time line is for processing the Actuarial
Study. Trustee Langlois explained that once the Board comes to a consensus
on the assumptions, then the investment data will be finalized, the Actuarial
Report is then completed and given to the Pension Board in April for
approval. Upon approval of the Pension Board, he presents the Report to the
Village Board for their approval any change is retroactive at the beginning of
the year.
Chairman Fagan asked for a clarification of the salary increases trends that
were presented. Trustee Langlois explained that paramedic incentives
affected the salary increases. Chairman Fagan noted that six employees
were not included in the listing. Trustee Langlois will verify that the
information is correct as the schedule just indicates the trend of the pension.
Trustee Langlois and Harris concurred in keeping the assumption of 7.5% for
the rate of return.
Motion by Trustee Langlois, seconded by Trustee Schlindwein, direct the
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7. a.
Actuary to complete the Actuarial Study using an investment return
assumption of 7.5% and a salary increase assumption of 5.25 %, complete the
study using the final audited investment data with presenting the Actuarial
Study in April.
ROLL CALL VOTE:
Ayes: 3 - Trustees Harris, Langlois and Schlindwein.
Nays: 1 - Secretary Fagan.
Absent: 1 - President Erickson. Motion carried.
b. Treasurer's Report of the Asset Summary of The Fund
Trustee Langlois noted that The Fund has 45% in equities and Merrill Lynch
has a large amount of cash that should be re- invested at this time. He
recommended that $600,000 be transferred from Merrill Lynch to MB
Financial.
Motion by Trustee Langlois, seconded by Trustee Schlindwein, to transfer
$600,000 from Merrill Lynch to MB Financial. ROLL CALL VOTE:
Ayes: 4 - Secretary Fagan, Trustees Harris, Langlois and Schlindwein.
Nays: 0 - None.
Absent: 1 - President Erickson. Motion carried.
c. MB Financial Investment Management Presentation
Tom Sawyer explained that since inception the annual performance is 3.24 %,
stocks 10.24 %, bonds 3.07% and 3.96% for T- bills. The portfolio
allocations are 24% for U.S. Treasury securities, 36% U.S. Government
Agency Notes/Bonds non - callable, 27% U.S. government Agency
Notes /Bonds callable, 8% taxable Municipal Bonds and 5% U.S.
Government Agency Mortgage Backed securities.
d. Approve Investment Transactions
Motion by Trustee Harris, seconded by Trustee Schlindwein, to approve the
investment transactions from September 30, 2006 through December 31,
2006 in Tab 5 of the MB Financial Performance Report. ROLL CALL
VOTE:
Ayes: 4 - Secretary Fagan, Trustees Harris, Langlois and Schlindwein.
Nays: 0 - None.
Absent: 1 - President Erickson. Motion carried.
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7. e. Merrill Lynch Investment Presentation
Brian Speers noted the beginning balance of The Fund in January, 2006 was
$9,463,252 and closed at $10,407,702. $500,000 was transferred for
investments during the year.
He indicated that Merrill Lynch recommends replacement of the Goldman
Sachs Fund as it is still under performing at the next meeting if the Sudan
Act has been settled. Until this issue is resolved, they recommend deferring
any changes. He also recommended the Board consider the concept of
increasing the foreign investment at their next meeting.
f. Approve Investment Transactions — None were presented.
g. Approval of 2007 Pension Increases
Trustee Langlois explained the 2007 pension increases. He noted that Robert
Mylan's calculation is different due to the 3% each year he is retired from
09/13/1979. Department of Insurance recommended the calculation that was
presented to the Board.
Motion by Trustee Langlois, seconded by Trustee Harris, to approve the
2007 Pension Increases as presented. ROLL CALL VOTE:
Ayes: 4 - Secretary Fagan, Trustees Harris, Langlois and Schlindwein.
Nays: 0 - None.
Absent: 1 - President Erickson. Motion carried.
h. Discussion and Approval of Lauterbach & Amen, LLP Contract
Trustee Langlois explained the work that the company performs for the
Pension Fund.
Motion by Secretary Fagan, seconded by Trustee Schlindwein, to approve
the Lauterbach & Amen, LLP Contract as presented. ROLL CALL VOTE:
Ayes: 4 - Secretary Fagan, Trustees Harris, Langlois and Schlindwein.
Nays: 0 - None.
Absent: 1 - President Erickson. Motion carried.
i. Discussion of April Election of Oak Brook Firefighters Pension Board
Trustee
Secretary Fagan explained that his term expires in May and an election will
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7. i.
need to be held in April for the Trustee position to the Board of Trustees. He
explained that two days of election occur on the three shifts. An e -mail is
sent to the firefighters requesting nominations. Secretary Fagan indicated
that it depends whether he runs again if there is more than one candidate for
the election. The Board recommended that he consider running again for the
position.
8. INFORMATION & UPDATES
Trustee Langlois acknowledged that he receives a packet of the financial data
from Lauterbach & Amen at the end of each month and if any Board members
wish to receive the data also. None of the Board members indicated they
wished to receive the information.
Chairman Fagan explained that Seyfarth & Shaw, law firm representing the
Village, has filed a Freedom of Information Request from Gary Naus and
Frank Richter regarding their pension awards. This matter has been referred to
Attorney Richard Reimer.
Trustee Harris noted that Attorney Mehler from the same firm requested a
FOIA request regarding his disability award. Pension Clerk Gonnella will
follow up in this matter. Trustee Schlindwein noted Attorney Reimer
increased his hourly rates but did not notify the Board of the rate increase. The
Pension Clerk will verify with Attorney Reimer's office regarding this matter
and it should be on the record that the rate is approved by the Board.
Chairman Fagan also indicated that the Board is waiting for the Findings of
Fact on Firefighter William Garrigan's disability application. Trustee Langlois
that he is getting paid his pension at this time. Pension Clerk Gonnella noted
that she contacted Attorney Reimer and the transcription of the hearing is still
being processed.
Chairman Fagan further noted that the pension form indicated that the
applicant needed to submit a letter of resignation. This is incorrect and should
be deleted from the application form. Pension Clerk Gonnella contacted
Attorney Reimer and he indicated that this incorrect and a resignation letter is
not required.
The Board recommended the next quarterly meeting to be held Monday, April
23rd at 9:00 a.m.
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9. ADJOURNMENT
Motion by Trustee Shlindwein, seconded by Trustee Langlois, to adjourn the
regular meeting at 11:05 a.m. VOICE VOTE: Motion carried.
ATTEST:
s \John Fagan
Secretary
s \Linda K. Gonnella
Recording Secretary
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