Minutes - 04/26/2011 - Firefighter's Pension Fund BoardMINUTES OF A REGULAR MEETING OF THE BOARD OF TRUSTEES
OAK BROOK FIREFIGHTERS' PENSION FUND
APRIL 26, 2011
A regular meeting of the Board of Trustees of the Oak Brook Firefighters' Pension Fund was held on April 26,
2011 at 9:OOAM at the Butler Government Center, Upper Level Conference Room at 1200 Oak Brook Road,
Oak Brook, IL 60523 pursuant to notice, a copy of which is attached to their minutes.
CALL TO ORDER BY PRESIDING OFFICER
A motion by Dangles to appoint Board Secretary John Fagan to serve as pro tern for President Michael
Erickson, second by Schlindwein. Motion unanimously carried.
Secretary John Fagan serving as pro tern called the meeting to order at 9:04 AM
ROLL CALL
Upon roll call the following answered:
Present: Secretary John Fagan, Trustee/Treasurer Sharon Dangles, Trustee Mark Fleishman,
Trustee Timothy Schlindwein
Absent: President Michael Erickson (excused)
Also Present: David Russell of Investment Performance Services, Terese Krafcheck and Jim Hrabak
of MB Financial, Becky Davis of Lauterbach & Amen (L &A)
PUBLIC COMMENT - none
APPROVAL OF MINUTES — March 03, 2011
The Board reviewed the March 03, 2011 regular meeting minutes as presented in the board meeting packet. A
motion by Dangles to approve the March 03, 2011 minutes as presented, second by Fleishman. Motion
unanimously carried.
CONSENT AGENDA — V Quarter 2011 Disbursements
The Board reviewed and discussed the Consent Agenda and follow up detail as presented in the board meeting
packet. A motion by Fagan to approve the Consent Agenda stating a grand total of disbursements for
January, February and March 2011 Net Payroll Payouts and Vendor Payouts of $482,908.25, second by
Schlindwein. Roll Call Vote: Fagan — aye, Schlindwein — aye, Fleishman — aye, Dangles — aye. Motion
unanimously carried.
UNFINISHED BUSINESS
Rules and Regulations: The Board had discussed at a previous meeting possibly adding a notation or disclaimer
regarding board members being approached to discuss volatile topics; there will be a review of the Rules and
Regs and further discussion at a later meeting. - TABLED until the next regular meeting.
NEW BUSINESS
a. Elections Results: The Board discussed and reviewed the election results. A motion by Fagan to certify
the election results for the active member position held by Michael Erickson; running unopposed and
re- elected by acclamation for another 3 year term ending may 2014, second by Fleishman. Motion
unanimously carried.
b. Board Officer Position elections: The Board discussed using a slate to keep positions as they are currently.
A motion by Fagan to retain President Michael Erickson and Secretary John Fagan in their current,
respective positions, second by Schlindwein. Roll Call Vote: Fagan — aye, Schlindwein — aye,
Fleishman — aye, Dangles — aye. Motion unanimously carried.
c. Treasurer's Report of the Asset Summary of the Fund: Dangles distributed and reviewed the Asset
Summary as of March 31, 2011 with the Board; reporting Total Assets market value of $22,660,155, a gain
of $366,288 since 12/31/2010; Fixed Income market value of $11,545,689 and Equity Funds market value
of $11,114,467; Asset Allocations: Fixed Income 50.95% and Equity 49.05 %. Target Allocations: Fixed
Income 55% and Equity 45 %. The Board discussed rebalancing the Asset Allocations at the next meeting.
— TABLED until the next meeting. A motion by Fagan to accept the Treasurer's Asset Summary
report, second by Dangles. Motion unanimously carried.
d. Investment Performance Services: Russell introduced MB Financial representatives Krafcheck and Hrabak
who distributed and presented Corporate Bond options and their recommendations for target exposure,
ratings and risk control. Russell applauded MB's performance and discussed his recommendation to the
Board to provide direction for duration to the manager and possible higher allocation for Corporate Bond
levels. The Board reviewed and discussed the handout distributed "The Last Full Interest Rate Cycle 1958 —
2011, 10 -yr Treasury Rate vs. Inflation (CPI)'; historical charts discussed and concerns regarding inflation;
decisions to be made over the next six to nine months; benchmarks and possible future presentations.
Russell recommended that the Board accept MB's custody proposal and move Equity Assets from Merrill
Lynch to MB Financial as custodian; fee schedules were provided and discussed. Hrabak distributed and
reviewed the portfolio performance report. As of March 31, 2011 the Total Fund market value was
$11,370,328 — Fixed Income and Cash & Equiv.; up 0.33% for the latest quarter; a change due to investment
of $37,925.
Krafcheck and Hrabak were excused and left the meeting at 10:34 AM
Russell proceeded to review the 12/31/2010 Investment Performance Analysis — 4`s Quarter 2010 up 3.6 %;
YTD up 10.7 %; investment earning of $759,705 with an ending market value of $21,976,942; asset
allocations were discussed.
Dangles was excused and left the meeting at 10:45 AM
Russell reviewed the performance reports for the period ending March 3I't and a second summary report as
of April 30, 2011. As of 03/31/2011 the Total Fund was up 3.1% with investment earnings of $676,424 and
an ending market value of $22,491,294; current allocations were Domestic Equity 44.9 %, International
Equity 4.5% and Fixed Income /Cash 50.6 %; review of the Merrill Lynch portfolio and discussion on
returns since inception (August 2004). Russell presented an Asset Allocation Study and reviewed the
assumptions used and the new percentage changes in the fixed income and "equity" allocations imposed by
the IL Pension Code as of 06/30/2010 and 06/30/2011. Russell discussed his attendance at the IPPFA
conference in Rockford and discussions with Scott Brandt, from the Illinois Department of Insurance, about
various private rulings on permitted investment strategies and used the Vanguard Star Fund as an illustrative
example.
The Board took a break at 11:47 AM
The Board reconvened at 12:12 PM
Russell discussed the "black lined" copy of the proposed changes to the investment policy statement as well
as the "clean" copy of the proposed investment policy statement. The Board ,stated that the Board Attorney
should review and approve the revised investment policy before any further action. — TABLED until the
next meeting.
Dangles returned, joining the meeting at approximately 12:30 PM
e. Village Retro Contributions: The Board reviewed and discussed the Memo from Dangles dated March 23,
2011 as presented in the board meeting packet. A motion by Fagan to approve payment to the Village
requesting $39,309.95 due to the decrease in funding rate from 39.22% to 32.20% retroactive back to
January 1, 2011, second by Schlindwein. Roll Call Vote: Fagan — aye, Schlindwein — aye, Fleishman
— aye, Dangles — aye. Motion unanimously carried. Dangles distributed the final Tim Sharpe Actuarial
Report for December 31, 2010 to Board members.
f. Lauterbach and Amen Actuarial Services proposal: The Board reviewed and discussed the L &A Actuarial
Services proposal as presented in the board meeting packet. — TABLED until the next meeting.
g. Military Buy Back applications: The Board reviewed and discussed the Elections to Purchase Military
Service Served Prior to Employment applications received from Kyle Matousek and David Kaczmarczyk
which are in progress, waiting for the DOI portion to be provided; deferred until response from applicants is
received.
h. Renewal Fiduciary Liability Insurance: The Board discussed and reviewed the Mesirow Insurance Services
Fiduciary Liability Insurance policy renewal. A motion by Schlindwein to approve payment for the
annual policy renewal effective 04/30/2011 through 04/30/2012 with Mesirow Insurance in the amount
of $3,975 for Fiduciary Liability Insurance, second by Fleishman. Roll Call Vote: Fagan — aye,
Schlindwein — aye, Fleishman — aye, Dangles — aye. Motion unanimously carried.
i. Disability annual medical Evaluations: The Board discussed the annual medical evaluations for disabled
members — Fagan stated he will follow up. — TABLED until the next meeting.
j. 2011 Training: The Board reviewed the IPPFA trustee training available for 2011 as presented in the board
meeting packet; approval for trustee training registration fees and expenses — TABLED for further
discussion at the next meeting.
INFORMATION & UPDATES
a. Trustee Training Summary: The Board reviewed and discussed the Trustee Training Summary as presented
in the board meeting packet. All Board members need only an additional 8 hours to complete their training
for 2011.
b. Affidavits of Continued Eligibility: Davis reported that the affidavits are scheduled to be mailed the end of
May; follow up will be reported at each regular meeting until all pensioners are compliant.
c. Active file maintenance updates: Davis reported that File Maintenance Update forms have been distributed
to all active members; results will be reported at each regular meeting.
The Board discussed topics for the special meeting set for June 16`h at 8:00 AM to discuss the revised
investment policy statement and transfer of funds from Merrill Lynch to MB Financial; David Russell will be
informed of the special meeting date so he can be present.
ADJOURNMENT
A motion by Schlindwein to adjourn the meeting at 1:05 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