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Minutes - 10/23/2012 - Firefighter's Pension Fund BoardMINUTES OF A REGULAR MEETING OF THE BOARD OF TRUSTEES OAK BROOK FIREFIGHTERS' PENSION FUND OCTOBER 23, 2012 A regular meeting of the Board of Trustees of the Oak Brook Firefighters' Pension Fund was held on Tuesday, October 23, 2012 at 9:OOAM at the Butler Government Center, West Wing Training Room located at 1200 Oak Brook Road, Oak Brook, IL 60523, pursuant to notice, to conduct regular business. CALL TO ORDER BY PRESIDING OFFICER President Michael Erickson called the meeting to order at 9:08 a.m. ROLL CALL Upon roll call the following answered: Present: President Michael Erickson, Secretary John Fagan, Trustee Mark Fleishman, Trustee Timothy Schlindwein, Trustee George Kouba Absent: None Also Present: Arthur Tepfer of Tepfer Consulting; Jason Franken of Foster & Foster; David Russell of Investment Performance Services, LLC (IPS); Becky Davis of Lauterbach & Amen, LLP (L &A) PUBLIC COMMENT — No public was present and no comment was made. APPROVAL OF THE PRIOR MEETING MINUTES The Board reviewed the prior meeting minutes presented in the board meeting packet. A motion was made by Trustee Kouba and seconded by Trustee Fagan to approve the July 25, 2012 minutes as written. Motion carried unanimously by voice vote. PRESENTATION AND APPROVAL OF THE BILLS The Board reviewed the third quarter 2012 disbursements presented in the board meeting packet. A motion was made by Trustee Schlindwein and seconded by Trustee Fagan to approve the disbursements stating net payroll payouts and vendor payouts for July, August and September 2012 totaled $509,533.79. AYES: Trustees Erickson, Fagan, Schlindwein, Fleishman and Kouba NAYS: None ABSENT: None INTERVIEWS FOR ACTUARIAL SERVICES The Board interviewed the actuarial services candidates; Todd Schroeder of L &A was unable to be present. Mr. Franken joined the meeting at 9:12 a.m. and left after his interview at 9:40 a.m. Mr. Tepferjoined the meeting at 9:40 a.m. and left after his interview at 10:20 a.m., at that time the Board took a short break and reconvened at 10:25 a.m. After further discussion, the Board agreed to make their selection. A motion was made by Trustee Kouba and seconded by Trustee Schlindwein to engage Foster & Foster for a one year period at a cost of $3,500, subject to extension, and review of any contract by the Board Attorney. AYES: Trustees Erickson, Fagan, Schlindwein, Fleishman and Kouba NAYS: None ABSENT: None Ms. Davis was directed to contact Mr. Tepfer and Mr. Franken to communicate the Board's decision. INVESTMENT PERFORMANCE SERVICES Mr. Russell distributed copies of the 09/30/2012 investment performance report and reviewed it with the Board. As of 09/30/2012, the Fund was up 2.5% for the quarter and up 7.2% year -to -date, the ending market value was $23,144,848. The S &P 500 benchmark was up 6.4% for the quarter and up 16.4% year -to -date. Investment earnings were up $573,693 for the quarter and up $1,553,554 year -to -date. Asset allocations were: total domestic equity 36.3 %, total international equity 14.8 %, total fixed income 45.6 %, and total cash 3.4 %. Since inception, January 2010, the portfolio is up 7.5 %. Oak Brook Firefighters' Pension Fund Minutes of Meeting — October 23, 2012 Page 2 of 3 Mr. Russell commented on the current market conditions stating that equities did not keep up with the benchmarks, and Westcore Select continued to underperform the benchmark. Mr. Russell distributed copies of the Investment Manager Review — Mid Capitalization Growth Equity Style report for the period ending 06/30/2012, and reviewed it with the Board. The Board considered Mr. Russell's recommendations and selected Westport Fund to replace Westcore Select. A motion was made by Trustee Schlindwein and seconded by Trustee Kouba to liquidate Westcore Select and move those funds to the Westport Fund. AYES: Trustees Erickson, Fagan, Schlindwein, Fleishman and Kouba NAYS: None ABSENT: None Mr. Russell will expedite the funds transfer through Treasurer Sharon Dangles and MB Financial. The Board noted that MB Financial was not present, and did not need to be present at quarterly board meetings since Mr. Russell consolidates their information in the quarterly report IPS provides. However, the Board requested that MB Financial send electronic copies of their reports to the Board members and a paper copy to the Pension Fund. Mr. Russell indicated that he will communicate the Board's request to MB. A motion was made by Trustee Schlindwein and seconded by Trustee Kouba to accept the investment report as presented. Motion carried unanimously by voice vote. The Board agreed there were no changes needed to contractual agreements with custodians or advisors at this time. Mr. Russell left the meeting at 11:38 a.m UNFINISHED BUSINESS The Board discussed the Administrative Rules and Regulations, including amendments added for media exposure and disabled members' annual medical exams. A motion was made by Trustee Fagan and seconded by Trustee Kouba to adopt the amended Rules and Regulations to include the media exposure addendum, and the additional requirement for disabled members, under 50 years old, to return to Illinois (or within 50 miles of Illinois) to complete their annual medical exam, if a qualified physician is not available in their area. Motion carried unanimously by voice vote. Ms. Davis will submit the revised Administrative Rules and Regulations to the Illinois Department of Insurance (11301) to be filed with the State. The Board discussed the updates for disabled members' annual medical exams for Paul Jacobs and Sean Smyth. Mr. Jacobs has completed his exam and Mr. Smyth's report is expected to come soon. The Board discussed the accounting work papers, bank and investment statements for 2001 through 2005 being held at L &A for direction from the Pension Board. The Board asked Ms. Davis to communicate with Treasurer Dangles on the procedures the Village uses for record retention and destruction and to follow Ms. Dangles' direction. NEW BUSINESS The Board reviewed the L &A engagement letter presented in the board meeting packet. A motion was made by Trustee Kouba and seconded by Trustee Schlindwein to approve the L &A engagement letter subject to Treasurer Dangles' review and authorized President Erickson to sign his approval and/or negotiate any fees. AYES: Trustees Erickson, Fagan, Schlindwein, Fleishman and Kouba NAYS: None ABSENT: None The Board discussed the professional service contracts for the following services: • IDOI report is to be completed by L &A per their engagement letter through 2015 Oak Brook Firefighters' Pension Fund Minutes of Meeting — October 23, 2012 Page 3 of 3 • Annual audit is completed by the Village • Actuarial services will be completed by Foster & Foster for 1 year Since the Board Treasurer was not present at the meeting, the Board agreed to address the tax levy recommendation and the Municipal Compliance Report at the January 2013 meeting. The Board agreed upon the following 2013 board meeting dates: January 29", April 23`a, July 23`a and October 22 "a The Board will meet at the same time and location. INFORMATION & UPDATES The Board noted the following informational items: • Affidavits of continued eligibility have been received by all members, although Ms. Davis reported that one member was unable to get his form notarized due to infirmity. Mr. Rogers has spoken to Ms. Davis and will obtain assistance next year to have his affidavit notarized. • The Trustee training summary was reviewed and it was noted that all members are up -to -date with their required training, with the exception of Mr. Kouba, who is in the process of completing his 32 -hour new trustee training. • A Freedom of Information Act (FOIA) request was received and completed in a timely manner. The Board discussed FOIA procedures. CLOSED SESSION — The Board agreed there was no need to hold a closed session. ADJOURNMENT A motion was made by Trustee Erickson and seconded by Trustee Schlindwein to adjourn the meeting at 12:26 p.m. Motion carried unanimously by voice vote. Respectfully submitted, Michael Erickson, President John Fagan, Secretary Minutes prepared by Pension Services Administrator, Becky Davis