Minutes - 03/03/2011 - Firefighter's Pension Fund BoardMINUTES OF A SPECIAL MEETING OF THE BOARD OF TRUSTEES
OAK BROOK FIREFIGHTERS' PENSION FUND
MARCH 3, 2011
A special meeting of the Board of Trustees of the Oak Brook Firefighters' Pension Fund was held on
March 3, 2011 at 9:OOAM at the Butler Government Center, Upper Level Conference Room at 1200
Oak Brook Road, Oak Brook, EL 60523 pursuant to notice, a copy of which is attached to their
minutes.
CALL TO ORDER BY PRESIDING OFFICER
President Mike Erickson called the meeting to order at 9:03 AM
ROLL CALL
Upon roll call the following answered:
Present: President Michael Erickson, Secretary John Fagan, Trustee/Treasurer Sharon Dangles,
Trustee Mark Fleishman, Trustee Timothy Schlindwein
Absent: none
Also Present: Dave Russell of Investment Performance Services, Becky Davis of Lauterbach & Amen
Tim Sharpe (via conference call), Fire Chief McEllin (arrived late)
PUBLIC COMMENT - none
APPROVAL OF MINUTES — January 20 and February 18, 2011
The Board reviewed the January 20 regular meeting minutes and February 18, 2011 special meeting
minutes as presented in the board meeting packet. The Board noted an amendment to the Consent
Agenda shown on the January 20, 2011 minutes. A motion by Schlindwein to approve the January
20, 2011 minutes noting an amendment to the December 2010 Vendor Payouts amount which
should be $32,585.85; the Grand Total of Disbursements should be $468,818.58, and to approve
the February 18, 2011 meeting minutes as presented, second by Fleishman. Motion carried.
UNFINISHED BUSINESS
a. Affidavits of Continued Eli ibg ilim The Board discussed sending out the Affidavits of Continued
Eligibility to pensioners along with annual medical evaluations for disabled members under 50
years old.
b. Active file maintenance updates: The Board discussed the active member pension file maintenance
currently in progress.
C. Trustee Training Summary: The Board reviewed and discussed the Trustee Training Summary.
NEW BUSINESS
a. Village Board meeting update: The Board discussed the recent Village Board meeting in which the
Illinois Pension Funds were discussed; Board Attorney Rick Reimer was present at the Board's
request to educate and answer the Village Trustees questions. The Board discussed possibly
adding a notation or disclaimer to the Rules and Regs. with regard to discussing or being
approached to discuss volatile topics. ** Note. for agenda item for next meeting. Rules and
Reguladons/guidelines. Trustee Dangles will be drafting a memo stating pensioner statistics. The
Board discussed closed and open session meetings.
Fire Chief McEllin joined the meeting at 9:55 AM
b. Tim Shgoe — conference call: The Board placed the conference call at 10:20 AM to Actuary, Tim
Sharpe, to discuss the actuarial report results and assumptions. The Board discussed the new
legislation in regards to the new hires as of 01/01/2011; more opportunities to go into
Equities /Corporate Bonds; investment returns. The conference call ended at 11:07 AM.
The Board took a break at 11:07 AM
The Board reconvened at 11:18 AM
The Board further discussed salary assumptions; and the status of the Fire union contract. A
motion by Schlindwein to direct Tim Sharpe to use scenario #2 at 100% amortization and an
investment return assumption of 6 -3/4 %, addressing projected unit credit and entry age
method, second by Fleishman. Roll Call Vote: Erickson — yes, Fagan — yes, Fleishman — yes,
Dangles — yes, Schlindwein — yes. Motion unanimously carried.
c. Lauterbach and Amen Actuarial Services: The Board discussed requesting a proposal from L &A
for actuarial services. A motion by Schlindwein to request a formal proposal from L &A for
actuarial services, second by Fagan. Roll Call Vote: Erickson — yes, Fagan — yes, Fleishman
— yes, Dangles — yes, Schlindwein — yes. Motion unanimously carried.
d. IPS Investment Consultant Presentation: The Board introduced Investment Advisor, Dave Russell,
from IPS; Russell discussed with the Board the transition to Investment Performance Services.
Russell distributed a Transition Update to the Board, which outlined the status of actions taken
since IPS was engaged: (1) Obtained holding information and historic performance from MB
Financial Bank (Fixed Income) and Merrill Lynch (Equity); (2) on track to produce a
comprehensive Performance Report to be presented at the next Board meeting on April 26`h; (3)
have evaluated the Pension Fund's investment strategies and holdings which were presented in two
separate handouts: Preliminary Mutual Fund Evaluations — a brief review of the Fund's equity
holdings, and, Thinking Ahead: Interest Rate and Inflation Risk in Bond Portfolios — representing
information on potential risks to the Fund's portfolio; the Performance Report, a more detailed
analysis of both equity and fixed income, will be presented at the April 26th meeting; (4) have
obtained a copy of the IL Pension Code and have become familiar with its requirements and
restrictions; applied for membership in the IPPFA and registered for the March 16`" Regional
Seminar on ethics, fiduciary and investment training in Rockford, IL; (5) have reviewed the
investment policy statement and prepared a Discussion Draft of suggested changes to the policy
with some suggested language to supplement the existing policy, for discussion with the Board
with regard to the new legislation; (6) prepared for today's presentation a handout called
Introduction of Modem Portfolio Theory and Efficient Frontier Analysis — providing an overview
of key elements of how an asset allocation study is conducted for discussion and review with the
Board and Mr. Russell's consultant biography.
Trustee Dangles left the meeting at 12:18 PM
Fire Chief McEllin discussed foreign investments with Russell. The Board discussed and reviewed
Russell's preliminary recommendations of the Fund's Mutual Funds and the Investment Policy
recommended language changes; custody issues with Merrill Lynch.
Fire Chief McEllin distributed to the Board a Village Memo regarding Fire Pension disabilities.
Dave Russell was excused and left the meeting at 1:26 PM.
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Fire Chief McEllin left the meeting at 1:29 PM
The Board discussed Mr. Russell's presentation.
ADJOURNMENT
A motion by Schlindwein to adjourn the meeting at 1:46 PM, second by Fleishman. Motion
unanimously carried.
Respectfully submitted and minutes prepared by Pension Services Administrator, Becky Davis
ATTEST: Michael Erickson, President
John Fagan, Secretary