Minutes - 07/30/2007 - Firefighter's Pension Fund BoardMINUTES OF THE JULY 303 2007 REGULAR
MEETING OF THE BOARD OF TRUSTEES OF THE
OAK BROOK FIREFIGHTERS PENSION FUND
APPROVED AS WRITTEN ON OCTOBER 29, 2007.
CALL TO ORDER
The Regular Meeting of the Board of Trustees of the Oak Brook Firefighters
Pension Fund was called to order by President Erickson at 9:13 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: President Michael Erickson, Trustees Scott Harris, Darrell J.
Langlois and Timothy Schlindwein.
ABSENT: Secretary John Fagan.
IN ATTENDANCE: Brian Speers, Merrill Lynch and Vice President John
Falduto, MB Financial.
3. APPROVAL OF MINUTES
a. Approval of Board of Trustees Regular Meeting Minutes of April 23, 2007
Trustee Harris stated he did not believe that the Findings of Fact should
have been changed as stated in the minutes. He stated that it was the
preference of the Board how much detail should have been included. The
Board requested that the Pension Clerk review the tape recording for further
clarification of the minutes.
Motion by Trustee Schlindwein, seconded by Trustee Lanlgois, to table this
agenda item to the next meeting. VOICE VOTE: Motion carried.
4. CONSENT AGENDA
All items on the Consent Agenda are considered to be routine in nature and will
be enacted in one motion. There will be no discussion of these items unless a
Board member so requests, in which, event, the item will be removed from the
Consent Agenda and considered as the first item after approval of the Consent
Agenda.
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4. Motion by Trustee Langlois, seconded by Trustee Harris, to approve the
Consent Agenda and authorize expenditures as presented. ROLL CALL
VOTE:
Ayes: 4 - President Erickson, Trustees Harris, Langlois and Schlindwein.
Nays: 0 - None.
Absent: 1 - Secretary Fagan. Motion carried.
a. Approval of March 1 -31, 2007 checks in the total amount of $110,315.14
b. Approval of April 1 -30, 2007 checks in the total amount of $106,137.21
c. Approval of May 1 -31, 2007 checks in the total amount of $115,776.91
d. Approval of June 1 -30, 2007 checks in the total amount of $106,805.94
e. Approval of Department of Financial & Professional Regulation Division of
Insurance Fees in the total amount of $4,011.09
f. Approval of Richard J. Reimer's Invoices in the total amount of $1,240.71
g Approval of Pension Clerk's hours from April through June, 2007 in the
total amount of $320.25
5. ITEMS REMOVED FROM THE CONSENT AGENDA — None presented.
6. UNFINISHED BUSINESS
a. Approval of Decision and Order — William Garrigan Line of Duty Disability
Trustee Langlois indicated that this was a process issue as the entire Board of
Trustees should have reviewed the Decision and Order regarding line of duty
disability of William Garrigan rather than only the Board officers.
The Board requested contacting Attorney Richard Reimer to correct
Paragraph 2 of the Decision and Order that "arms" was not the reason for his
disability. It was a consensus of the Board that it was the evidence presented
not point of fact in approving the line of duty disability.
Motion by Trustee Langlois, seconded by Trustee Schlindwein, to table the
ratification of William Garrigan's Decision and Order of line of duty
disability as it was not acceptable as presented. VOICE VOTE: Motion
carried.
7. a. Treasurer's Report of the Asset Summary of The Fund.
Finance Director Langlois explained that equity investments are over
$500,000 of the required investment allocation as stated in The Fund's
Investment Policy. The Investment Policy states that The Fund should be re-
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7. a.
balanced at the July Board meeting.
Motion by Trustee Langlois, seconded by Trustee Schlindwein, to transfer
$250,000 on August 9, 2007 to move toward the maximum statutory amount.
ROLL CALL VOTE:
Ayes: 4 - President Erickson, Trustees Harris, Langlois and Schlindwein.
Nays: 0 - None.
Absent: 1 - Secretary Fagan. Motion carried.
b. Merrill Lynch Investment Management Presentation
Mr. Speers remarked that the 2007 year -to -date equity investments increased
7.80% with a market value of $10,798,600. Merrill Lynch indicated that
they are watching the Dreman Fund as they are slightly concerned with their
numbers and may make a recommendation to change this fund in the future.
Goldman Sachs is targeted for replacement now with the Sudan Act not a
factor. He recommended building out the foreign fund with $250,000 in
August and September of this year to be used to re- balance The Fund. If the
fiends are taken out of the value funds, Merrill Lynch would adjust all of the
allocations according to their target allocations in The Fund's Investment
Policy.
Trustee Schlindwein asked if Merrill Lynch could provide the Board with
their scores on all of the underlying funds. He requested to add to the grid
the sense of risk, standard deviation and square factor. He further requested
to provide the Board with the Morning Star ratings to their own scores.
Trustee Schlindwein also requested a copy of the fees that Merrill Lynch is
paid from each of the funds and if all the Merrill Lynch teams are paid the
same fees. Mr. Speers indicated that all of this data will be provided to the
Board at their next quarterly meeting.
c. Approve Investment Transactions — None were presented.
d. MB Financial Investment Presentation
Mr. Falduto announced to the Board that Tom Sawyer had retired from MB
Financial. He introduced David Harrington and Brian Wildman from the
Asset Management Group of MB Financial who would oversee the funds
investments.
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7. d.
Mr. Falduto gave the investment management presentation. The money
market return for the second quarter was 1.26 %, fixed income return was -
0.19% with a total account return of - 0.18 %. Year -to -date the money market
return was 2.54 %, fixed income return was 1.48% with a total account return
of 1.49 %. Since inception the annual performance was 3.24 %, stocks
10.24 %, bonds 3.07% and T -bills 3.96 %. The fixed income sector current
allocations for US Treasury securities was 23 %, US Government Agency
Notes /bonds non - callable 37 %, US Government Agency Notes /bonds
callable 26 %, Taxable Municipal Bonds 10% and US Government Agency
Mortgage Backed securities was 4 %.
e. Approve Investment Transactions
Motion by Trustee Langlois, seconded by Trustee Harris, to approve the
investment transactions as listed in Tab 5 of MBFinancial's Performance
Report. ROLL CALL VOTE:
Ayes- 4 - President Erickson, Trustees Harris, Langlois and Schlindwein.
Nays: 0 - None.
Absent: 1 - Secretary Fagan. Motion carried.
The Board discussed the Investment Managers of The Fund. Trustee
Schlindwein recommended that the investment philosophy of Merrill Lynch
should be discussed further with the Board as he voiced his concern of the
level of information the Board receives and their ability of making a decision
from the data. He recommended that the Board have further discussions of
the international funds as a split between value and growth funds would be a
good idea.
Motion by Trustee Langlois, seconded by Trustee Harris, to move half of the
foreign position to the Van Kempen Fund subject to confirmation by Merrill
Lynch that the 12/05 inception date of the Van Kampen Fund qualifies under
the five year rule according to State Statute and request further information
from Merrill Lynch on the Dodge and Cox and American EuroPacific to
discuss at the next Board meeting. ROLL CALL VOTE:
Ayes: 4 - President Erickson, Trustees Harris, Langlois and Schlindwein.
Nays: 0 - None.
Absent: 1 - Secretary Fagan. Motion carried.
The Board further discussed equity investment strategy, whether the strategy
should include an allocation to index funds and the manner in which it
receives investment advice. Trustee Langlois informed the Board that
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7 e.
although Merrill Lynch is a fiduciary, the nature of the relationship is that
Merrill Lynch does not provide independent investment advise and the funds
that it recommends are limited to those sold by Merrill Lynch. The manner
in which Merrill Lynch is paid is by commission imbedded in the mutual
fund cost structures as opposed to a percentage of asset fees that would
normally be paid to an independent investment adviser. To date the
investment performance of The Fund has been good since Merrill Lynch
took over. If the Board desires to obtain independent investment advice, a
few select firms with experience in this area could be interviewed.
f. Approval of Firefighter Dennis Schultz's Application for Pension Benefits of
the Oak Brook Firefighters Pension Fund
President Erickson announced that Dennis Schultz gave him a letter before
the Board meeting this morning requesting his buying credible service of 16
months as stated under Section 4.08 of the Illinois Pension Code. This will
require more work in researching his request to purchase his credible service.
Finance Director Langlois explained that the applicant was on disability for
five or six years as he was awarded a non -duty disability. He could buy up
to three years of service. He will contact Attorney Reimer for his legal
opinion in this matter due to the timing of his request as Dennis Schultz may
have already retired.
Trustee Schlindwein suggested that retirees should be aware of this process.
Trustee Langlois noted that the firefighters are not counseled on this but as
members of IPPFA, they receive information on this process.
Motion by Trustee Langlois, seconded by Trustee Harris, to table Dennis
Schultz's Application for Retirement Benefits to the Oak Brook Firefighters
Pension Fund and seek further clarification from Attorney Reimer regarding
his right to benefits under State Statute to buy back service disability time in
light of the fact that his request for benefit occurred after his retirement date.
ROLL CALL VOTE:
Ayes: 4 - President Erickson, Trustees Harris, Langlois and Schlindwein.
Nays: 0 - None.
Absent: 1 - Secretary Fagan. Motion carried.
8. INFORMATION & UPDATES
President Erickson explained that Firefighter Paul Jacobs is on light duty at this
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8. time. He is still going through the disability application process as all of his
medical records have not been received by Attorney Reimer.
The board discussed a date for the next quarterly meeting of Monday, October
29`x' at 9:00 a.m. Pension Clerk Gonnella will contact all of the Board members
for confirmation of that date.
9. ADJOURN TO A CLOSED MEETING to discuss minutes of meetings
lawfully closed under the Open Meetings Act, whether for the purpose of
approval by the body of the minutes or for semi - annual review of the minutes
as required by the Open Meeting Act Section 2.06 (2c21)
The Board did not adjourn to a closed meeting to review the closed meeting
minutes of October 25, 2006 and December 14, 2006 as they concurred that the
minutes were correct as presented.
Motion by Trustee Schlindwein, seconded by Trustee Langlois, to approve the
Closed Meeting Minutes of October 25, 2006 and December 14, 2006 as
presented. VOICE VOTE: Motion carried.
10. ADJOURNMENT
Motion by Trustee Harris, seconded by Trustee Schlindwein, to adjourn the
regular meeting at 11:55 a.m. VOICE VOTE: Motion carried.
ATTEST:
John Fagan
Secretary
Linda K. Gonnella
Recording Secretary
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