Minutes - 07/28/2011 - Firefighter's Pension Fund BoardMINUTES OF A REGULAR MEETING OF THE BOARD OF TRUSTEES
OAK BROOK FIREFIGHTERS' PENSION FUND
JULY 28, 2011
A regular meeting of the Board of Trustees of the Oak Brook Firefighters' Pension Fund was held on July 28,
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
President Michael Erickson called the meeting to order at 9:04 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: David Russell of Investment Performance Services, Terese Krafcheck and Jim Hrabak
of MB Financial, Todd Schroeder and Becky Davis of Lauterbach & Amen, LLP (L &A)
PUBLIC COMMENT - none
APPROVAL OF MINUTES —June 16, 2011
The Board reviewed the June 16, 2011 regular meeting minutes as presented in the board meeting packet;
noting a minor change. A motion by Fagan to amend the 06/16/11 minutes to add "to be" in the Public
Comment section where it states "...The Board held a general discussion regarding a memo to be sent to
the Mayor..." and approve the June 16, 2011 minutes as amended, second by Schlindwein. Motion
unanimously carried.
CONSENT AGENDA — 2 "d Quarter 2011 Disbursements
The Board reviewed and discussed the 2 "d Quarter Consent Agenda and follow up detail as presented in the
board meeting packet. A motion by Schlindwein to approve the Consent Agenda stating a grand total of
disbursements for April, May and June 2011 Net Payroll Payouts and Vendor Payouts of $524,674.57,
second by Fleishman. Roll Call Vote: Erickson — aye, Fagan — aye, Schlindwein — aye, Fleishman — aye,
Dangles — aye. Motion unanimously carried.
UNFINISHED BUSINESS
a. 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 for further discussion at a later meeting; copies to be entailed to the Board members
for review - TABLED until the next regular meeting.
b. Lauterbach & Amen. LLP Actuarial Services Proposal: Schroeder introduced himself and responded to
the Board's request to state his credentials; Schroeder discussed L &A's proposal to the Board and
reviewed services provided — the Board is considering Actuarial services for the 2012 report; L &A
proposed a cost of $2,150 /year; Schroeder discussed L &A's approach for a Funding Strategy Policy to
recommend the best way to handle the unfunded liability to keep the Fund healthy; mortality tables were
discussed. A motion by Fleishman to engage L &A's Actuarial Services for the 2012 report at a cost
of $2,150 /year — FAILED due to lack of a second. — TABLED for further discussion until the next
meeting. The Board requested Schroeder provide a copy of a sample actuary report for review.
c. 2011 Trustee Training: The Board discussed plans for completing 2011 training requirements, no plans to
attend a conference at this time; board members will complete training via online.
Krafcheck and Hrabak were excused and left the meeting at 9:56 am
The Board took a quick break at 9:56 am
The Board meeting reconvened at 10:01 am
d. Military Buy Back update: The Board discussed the application/calculation status of Military Buy Back
applications submitted by D. Kaczmarczyk and K. Matousek. Davis will follow up to determine status.
e. Disability Annual Medical Evaluations: Fagan discussed the status of IME's, formally handled by Pension
Board Recording Secretary; options were discussed including Board Attorney assistance; Rules and Regs
were discussed to determine procedures /limits for response time for IME's; 60 days for compliance. A
motion by Schlindwein to authorize reimbursement of expenses for Board Secretary to send a follow
up letter certified/return receipt to those IME's that have not been received, second by Fleishman.
Roll Call Vote: Erickson — aye, Fagan — aye, Schlindwein — aye, Fleishman — aye, Dangles — aye.
Motion unanimously carried. Fagan will draft and send out follow up letters as directed.
NEW BUSINESS
a. Treasurer's Report - Asset Summary of the Fund: The Board reviewed the Asset Summary as presented in
the board meeting packet. Dangles reviewed the June 30, 2011 Asset Summary with the Board; reporting
Total Assets market value of $22,874,983, Fixed Income market value of $11,783,486 and Equity Funds
market value of $11,091,497. Asset Allocations were: Fixed Income 51.51% and Equity 48.49 %. Target
Allocations: Fixed Income 55% and Equity 45 %. A motion by Schlindwein to accept the Treasurer's
Asset Summary report, second by Fleishman. Motion unanimously carried. Schlindwein distributed
and reviewed a historical look at the assets.
b. Certify Gail Meyers (John) surviving spouse monthly benefits: The Board reviewed Pension Calculation
History Worksheet prepared by L &A for John Meyers' Surviving Spouse / Occupational Disease
Disability and the discussed the overpayment to Gail Meyers due to John's death on 06/04/2010; L &A
was not informed of John's death until Gail submitted her Affidavit of Continued Eligibility received in
June of 2011. The Board acknowledged the 06/04/2010 death of pensioner John Meyers and noted the
$421.10 overpayment (2011 3% COLA increase should not have applied). A motion by Schlindwein for
follow up with Board Attorney for approved counsel on reducing payment of surviving spouse
benefits in the monthly amount of $84.55 over the next 5 months; monthly spousal benefits of
$4,070.43, pending Board Attorney approval, second by Fleishman. Roll Call Vote: Erickson — aye,
Fagan — aye, Schlindwein — aye, Fleishman — aye, Dangles — aye. Motion unanimously carried.
The Board took a break at 10:29 am
The Board meeting reconvened at 10:40 am
c. Investment Performance Services:
1. Custody Agreement: Russell distributed and discussed the Custody Bank Fee Survey and discussed
the recommendation for MB Financial Bank to be custodian for the equity assets of the plan based on
the following factors: (1) currently have good relationship as manager and custodian of fixed income
assets and are a local bank. (2) MB uses Northern Trust's "Trust/Rite" trust accounting system. (3)
MB quoted the lowest fee of the five vendors surveyed. After no further discussion the Board agreed
to sign the Custody Agreement. A motion by Fagan to authorize the appropriate Board members
to sign the Custody Agreement with MB Financial Bank to retain their services, second by
Fleishman. Roll Call Vote: Erickson — aye, Fagan — aye, Schlindwein — aye, Fleishman — aye,
Dangles — aye. Motion unanimously carried. The Board also signed authorization for MB to
release information to Investment Performance Services and L &A.
2. Revised Investment Policy Statement: The Board reviewed the revised Investment Policy statement
distributed and noted amendments for correction by Russell on the final statement. After no further
discussion the Board agreed to sign the revised as amended Investment Policy Statement. A motion
by Schlindwein to approve and adopt the revised Investment Policy Statement as amended,
second by Fagan. Roll Call Vote: Erickson — aye, Fagan — aye, Schlindwein — aye, Fleishman —
aye, Dangles — aye. Motion unanimously carried. Russell will submit a final copy with
2
amendments and Davis will submit the complete revised Investment Policy statement with signature
page to the IDOI to be filed with the State.
3. 2 "d Quarter 2011 Performance Report: Russell distributed Mutual Fund Information binder for the
Board's review and discussion; criteria used in the selection process was reviewed and discussed;
strategy and back up details. After no further discussion; a motion by Schlindwein to follow
Investment Advisor's recommendations as discussed and highlighted in the report as presented;
subject to amendments, second by Fleishman. Roll Call Vote: Erickson — aye, Fagan — aye,
Schlindwein — aye, Fleishman — aye, Dangles — aye. Motion unanimously carried. Russell
distributed the Preliminary Monthly Performance Analysis for the period ended June 30, 2011 and
reviewed the performance summary: Total Fund Market Value was $23,244,402 up 1.2% for the
quarter; Total Domestic Equity Mkt Value: $10,068,599 down 0.3 %; Total International Equity Mkt
Value: $1,022,899 up 1.4 %; Total Fixed Income Mkt Value: $11,455,253 up 2.5 %; Total Cash Mkt
Value: $697,652. Asset Allocations: Domestic Equity 43.3 %, International Equity 4.4 %, Fixed
Income 49.3 %, Cash 3.0 %. The Board received the MB Financial Bank performance report as of
06/30/11 and the ADV Brochure Supplements.
INFORMATION & UPDATES
a. Trustee Training Summary: The Board reviewed and discussed the Trustee Training Summary as
presented in the board meeting packet.
b. IRS Mileage Increase to .555 from July 1 — December 31, 2011: Informational item noted by the Board
c. Affidavits of Continued Eligibility: Davis reported that only one affidavit was outstanding and will
attempt further follow up. - TABLED for update at the next meeting.
d. Active file maintenance updates: The Board reported that File Maintenance Update forms have been
distributed to all active members; a spreadsheet will be provided for follow up.
e. Civil Union Law Effective 06/01/2011: The IL law effective 06/01/11 permits same -sex and opposite sex
couples to enter into a civil union in Illinois; Federal law does not recognize same -sex marriages, domestic
partnerships or civil unions; in Illinois civil unions must be documented and will be treated the same as
married. Pension files must be documented, same as married; QILDROs apply.
The Board discussed Open Meetings Act and Closed/Executive Session required exceptions.
ADJOURNMENT
A motion by Schlindwein to adjourn the meeting at 12:46 PM, second by Fleishman. Motion
unanimously carried.
Respectfully submitted,
Attest: Michael Erickson, President
John Fagan, Secretary
Minutes prepared by Pension Services Administrator, Becky Davis