Minutes - 10/29/2008 - Firefighter's Pension Fund BoardMINUTES OF THE OCTOBER 29, 2008 MEETING OF
THE BOARD OF TRUSTEES OF THE OAK BROOK
FIREFIGHTERS PENSION FUND APPROVED AS
WRITTEN ON JANUARY 28, 2008.
1. CALL TO ORDER
The Meeting of the Board of Trustees of the Oak Brook Firefighters Pension
Fund was called to order by President Erickson at 9:08 a.m. in the Upper Level
Conference Room of the Butler Government Center, 1200 Oak Brook Road,
Oak Brook, Illinois.
2. ROLL CALL
Pension Clerk Gonnella called the roll with the following persons
PRESENT: President Michael Erickson, Secretary Fagan, Trustees Scott Harris,
Darrell J. Langlois and Timothy Schlindwein.
ABSENT: None.
IN ATTENDANCE: Brian Speers, Merrill Lynch; David Harrington, Therese
Krafcheck and Robert Thompson, MB Financial and Pensioner Mark
Fleishman.
3. APPROVAL OF MINUTES
a. Approval of Board of Trustees Meeting Minutes of July 21, 2008
Motion by Secretary Fagan, seconded by Trustee Langlois, to approve the
Board of Trustees Meeting Minutes of July 21, 2008 as presented. 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.
a. Approval of June 1 -30, 2008 Net Payroll Payouts in the total amount of
$102,950.39 and Vendor Payouts in the total amount of $29,341.39
b. Approval of July 1 -31, 2008 Net Payroll Payouts in the total amount of
$102,780.21 and Vendor Payouts in the total amount of $18,100.42
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4. c. Approval of August 1 -31, 2008 Net Payroll Payouts in the total amount of
$102,932.79 and Vendor Payouts in the total amount of $19,130.00
d. Approval of September 1 -30, 2008 Net Payroll Payouts in the total amount
of $102,760.83 and Vendor Payouts in the total amount of $30,078.92
e. Approval of the Pension Clerk hours in the total amount of $530.19 for the
months of May through July, 2008
Motion by Trustee Harris, seconded by Trustee Schlindwein, to approve the
Consent Agenda as presented. ROLL CALL VOTE:
Ayes: 5 — President Erickson, Secretary Fagan, Trustees Harris, Langlois and
Schlindwein.
Nays: 0 — None.
Absent: 0 — None.
5. ITEMS REMOVED FROM THE CONSENT AGENDA — None presented.
6. UNFINISHED BUSINESS — None presented.
7. NEW BUSINESS
a. Treasurer's Report of the Asset Summary of The Fund
Trustee Langlois explained the portfolio allocation between stocks and bonds to
be under the target allocation of 45% due to the market decline. He
recommended not doing anything at this time. Trustee Schlindwein suggested
listening to the Investment Managers presentation before any decision is made.
b. Merrill Lynch Investment Management Presentation
Mr. Speers indicated that Bank of America will be purchasing Merrill Lynch
and it will remain the same with more services being offered. The Fund is
down approximately 30% in the equity investments at this time. He
recommended over the next twelve months consider re- balancing The Fund's
portfolio to the target allocations every quarter. He recommended placing this
on the agenda for the next meeting on how to proceed for a long term plan.
Trustee Langlois asked if Algiers Mid -Cap should be changed due to it being
off the benchmark. He asked if Merrill Lynch would recommend another fund
at the next meeting as it has been under the benchmark for the last five years.
c. Approval of Investment Transactions
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7. c.
Motion by Trustee Schlindwein, seconded by Secretary Fagan to approve the
investment transactions as presented by Merrill Lynch. ROLL CALL VOTE:
Ayes: 5 — President Erickson, Secretary Fagan, Trustees Harris, Langlois and
Schlindwein.
Nays: 0 — None.
Absent: 0 — None.
d. MB Financial Investment Management Presentation
Ms. Krafcheck gave the investment management presentation. The adjusted
beginning market value for the third quarter was $11,540,427 with the ending
market value of $11,695,670. The money market return was 0.62% for the
quarter, fixed income 1.33% with a total account return of 1.32 %. Year to date
the total account return was 2.65 %. The Board discussed alternatives for
investing. Trustee Langlois indicated there is a target allocation in the
investment policy for selling Treasury's of 10% + or — to rebalance.
e. Approval of Investment Transactions
Motion by Trustee Schlindwein, seconded by Secretary Fagan, to approve the
Investment Transactions as indicated in MB Financial's Investment
Management Report. ROLL CALL VOTE:
Ayes: 5 — President Erickson, Secretary Fagan, Trustees Harris, Langlois and
Schlindwein.
Nays: 0 — None.
Absent: 0 — None.
f. Approval of Gregory Memmesheimer's Application for Membership to the
Oak Brook Firefighters Pension Fund
Motion by Secretary Fagan, seconded by Trustee Harris, to approve Gregory
Memmesheimer's Application for Membership to the Oak Brook Firefighters
Pension Fund. ROLL CALL VOTE:
Ayes: 5 — President Erickson, Secretary Fagan, Trustees Harris, Langlois and
Schlindwein.
Nays: 0 — None.
Absent: 0 — None.
g. Discussion and Approval of the Confirmation of the 2009 Meeting Dates
for the Oak Brook Firefighters Pension Board of Trustees
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7. g.
Motion by Trustee Schlindwein, seconded by Secretary Fagan, to approve
Board meeting dates as needed for the year 2009. VOICE VOTE: Motion
carried.
h. Approval of Registration Fees for Illinois Professional Firefighters
Association (IPFA) 2008 Pension Seminar
The Board indicated they would pay for the Pension Clerk to attend the
seminar. Trustee Harris may attend without the cost of the registration fee as he
would assist the organization with the setup of the seminar.
Motion by Secretary Fagan, seconded by Trustee Harris, to reimburse Pension
Clerk Gonnella for the registration fee of the IPFA seminar. ROLL CALL
VOTE:
Ayes: 5 — President Erickson, Secretary Fagan, Trustees Harris, Langlois and
Schlindwein.
Nays: 0 — None.
Absent: 0 — None.
S. INFORMATION AND UPDATES:
President Erickson notified the Board that most of the annual Status Reports
have been returned from the active firefighters and pension recipients to the
Pension Clerks.
The Board discussed the Gift Ban Act. Trustee Langlois indicated that there is
a change in the law and the Board needs to be aware of the guidelines. This
should be discussed further at the next Board agenda.
The Board discussed the police pension board's annual dinner /investment
meeting for their membership to hear their investment manager's annual
presentation. Trustee Harris stated he would contact the pension recipients if
they are interested in a meeting in May. President Erickson suggested sending
out an e -mail to the active firefighters.
Retired pension recipient Mark Fleishman noted that the Board's meetings are
open meetings and anyone could attend if they want to know about the pension
fund. The Board agreed to discuss this further at their next meeting.
President Erickson distributed Marc Johnson's application for membership to
the pension fund that was never approved in 2004. Pension Clerk Gonnella
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8. explained why the mistake occurred was due to an election and in the transition
his name was not submitted for approval.
It was a consensus of the Board of the Trustees to approve Marc Johnson's
Application for Membership to the Oak Brook Firefighters Pension Fund as of
October 29, 2008 with ratification at the January Board of Trustees meeting.
Pension Clerk Gonnella noted that there are membership applications that had
been approved by Boards of Trustees years ago but not officially signed by the
Board officers at that time. She will have the former Board officers who still
work in the Fire Department sign the documents and type the names of those
Board officers who are now retired.
The Board discussed the next Pension Board meeting of Wednesday, January
28, 2009.
Trustee Langlois asked what actuarial assumptions the Board of Trustees wants
to use for the Actuarial Study. The Board discussed alternatives in mortality
rate assumption and the interest rate assumption. Trustee Langlois will present
preliminary numbers at the January Board meeting.
The Board returned to Agenda Item 7. e., Approval of Investment Transactions
7. e.
The Board returned to a discussion of investments of The Fund. Trustee
Schlindwein suggesting re- affirming the investment policies or what if any
changes need to be considered. The Board has a long view oriented pension
plan that the Board is committed to do and he suggested to put it on the record
that the Board has been diligent in the process.
He asked is it appropriate that the guideline for equity investments be 45 %, the
maximum by law, or should it change from a long term perspective. He
commented does the Board want to reaffirm, rebalance or leave the guidelines
as they are now in the investment policy. Trustee Langlois indicated that he did
not want to change the investment strategy but wait and let the investments
remain and see what occurs. He suggested revisiting the investments next
quarter.
Trustee Schlindwein asked if the target equity allocation of 45% be considered
a long term policy for the plan, and the Board concurred. The Board then
discussed the 10% treasury allocation in the investment policy for
diversification purposes and if it should change and divest some to
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7. e.
use the funds for equity investments. It is the policy to rebalance The Fund
once a year in July. Trustee Schlindwein suggested that if the target allocation
goes below 40% the Board should consider investing at that time. Secretary
Fagan recommended rebalancing The Fund quarterly rather than once a year. It
was a consensus of the Board of Trustees to invest in the equity market for the
quarter to get closer to the 45% target equity allocation. It was recommended
that the Merrill Lynch be directed to purchase the cheapest S &P Index Fund
(Large Cap).
Motion by Trustee Schlindwein, seconded by Secretary Fagan, to direct Merrill
Lynch to invest $150,000 a month for three months in an Index Fund and any
cash flow needs would come from The Fund.
The motion was amended by Trustee Schlindwein, seconded by Secretary
Fagan, to direct Merrill Lynch to invest $150,000 a month for three months in
an S & P 500 Index Fund and any cash flow needs from The Fund would come
from liquidating Treasury's up to a $1,000,000. ROLL CALL VOTE:
Ayes: 5 — President Erickson, Secretary Fagan, Trustees Harris, Langlois and
Schlindwein.
Nays: 0 — None.
Absent: 0 — None.
It was a consensus of the Board of Trustees if Merrill Lynch cannot buy a
Vanguard Index 500 Fund, then work with MB Financial to buy Vanguard.
Pension recipient Mark Fleishman addressed the Board of Trustees and
suggested that when the 45% equity investment allocation is being reached, to
adjust more frequently to preserve the capital for the benefits of the retired
firefighters.
9. ADJOURNMENT
Motion by Trustee Harris, seconded by Trustee Schlindwein, to adjourn the
meeting at 12:20 p.m. VOICE VOTE: Motion carried.
ATTEST:
s /John Fagan
Secretary
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9.
s /Linda K. Gonnella
Recording Secretary
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