Minutes - 07/15/2015 - Police Pension Fund BoardVILLAGE OF OAK BROOK
BOARD OF TRUSTEES OF THE POLICE PENSION FUND - Minutes
July 15, 2015
UNOFFICIAL UNTIL APPROVED AS WRITTEN
OR AS AMENDED BY BOARD OF TRUSTEES OF THE
POLICE PENSION FUND ON August 20, 2015
1.CALL TO ORDER:
The Regular Meeting of the Board of Trustees of the Oak Brook Police Pension Fund was called to order
by Vice President Alan Feldman at 8:07 p.m. in the West Wing Conference Room of the Butler
Government Center, 1200 Oak Brook Road, Oak Brook, Illinois.
2.ROLL CALL:
The roll was called with the following persons
PRESENT:Vice President Alan Feldman, Secretary Edward Caspers, Trustee Hitesh Patel, Trustee
Ben Kadolph
ABSENT:President Vel Torlo
IN ATTENDANCE: Courtney Cervantes, Jeff Kowalczyk and Bill Lowery of Lowery Asset
Consulting, LLC, Bob Thompson and Bob De Meulenaere of MB Financial, Pension Clerk Rose
Kane
3.ELECTION OF OFFICERS:
After a brief discussion regarding this item, there was consensus to table the item to the next regular
meeting in October due to the absence of President Torlo and input he would want to provide.
Motion by Vice President Feldman, seconded by Trustee Kadolph, to table the election of officers
to the next regular meeting due to the absence of President Torlo. VOICE VOTE: Motion carried.
4.PRESIDENT’S COMMENT: None presented.
5.APPROVAL OF MINUTES:
a.Approval of Board of Trustees Regular Board Meeting Minutes of April 22, 2015
Motion by Secretary Caspers, seconded by Trustee Kadolph, to approve the Minutes of the April
22, 2015 Regular Board Meeting as written. VOICE VOTE: Motion carried.
b.Approval of Board of Trustees Special Board Meeting Minutes of May 29, 2015
Motion by Secretary Caspers, seconded by Trustee Kadolph, to approve the Minutes of the May
29, 2015 Special Board Meeting as written. VOICE VOTE: Motion carried.
6 CONSENT AGENDA:
All items on the Consent Agenda are considered to be routine in nature and will be enacted in one
motion.
a.Approval of April 1-30, 2015 checks in the total amount of $202,049.82
b.Approval of May 1-31, 2015 checks in the total amount of $197,929.35
c.Approval of Lauterbach & Amen, LLP’s invoices in the total amount of $5,200.00 for professional
services in: October and December, 2014 and May, 2015
d.Approval of Midwest Environmental Medicine invoice in the amount of $1,195.00 for Disability
Evaluation
e.Approval of D’Masti Catering, Inc. invoice for deposit for catering of annual dinner in the amount of
$515.00
BOARD OF TRUSTEES OF THE POLICE PENSION FUND
Minutes Page 1 of 4 July 15, 2015
f.Approval of Oak Brook Bath & Tennis Club invoice for room rental for annual dinner in the amount of
$150.00
Motion by Secretary Caspers, seconded by Trustee Kadolph, to approve the Consent Agenda.
ROLL CALL:
Ayes: 4 – Vice President Feldman, Secretary Caspers, Trustee Patel, Trustee Kadolph
Nays: 0 – None
Absent: 1 – President Torlo. Motion carried.
7.ITEMS REMOVED FROM CONSENT AGENDA – None presented.
8.UNFINISHED BUSINESS – None presented.
9.NEW BUSINESS
a.Lowery Asset Consulting, LLC Report for Second Quarter, 2015 (attached)
Mr. Lowery discussed the Economic Overview and changes in interest rates on page 2 of their report, as
well as the issues in Germany and Greece. He then referred to the Financial Markets Overview which
stated that Health Care was the top performing sector.
Lowery’s report on page 9 stated that the Fund investment assets at MB Financial had a value of
approximately $32,787,721 as of June 30, 2015 and that the current allocation is 59.77% Equity and
36.3% Fixed Income and Cash as defined by the Illinois State statute.
The benchmark is currently set as: The current portfolio allocation:
55% Barclays Aggregate Bond 40.3% Fixed Income (includes PIMCO Mutual Fund)
25% S&P500 25.8% S&P500
7.5% Russell 2000 6.9% Russell 2000
7.5% MSCI EAFE Growth 18.2% MSCI EAFE
2.5% S&P Nat Resources 4.1% S&P Nat Resources
2.5% Wilshire REIT 4.7% Wilshire REIT
Mr. Lowery then discussed DF Dent’s performance and then referred to the last page of their report which
showed Domestic Sector Weights vs. S&P 500, comparing the current allocations using DF Dent with
PrimeCap and also with T. Rowe Price. He talked about the quarterly observations of the bond market
and remarked in particular to the MSCI EAFE Index and the High Yield market. He then discussed page 5
which showed the managers’ performance. Further discussion ensued comparing the performance of T.
Rowe Price, PrimeCap and DF Dent.
Motion by Trustee Patel, seconded by Trustee Kadolph, to allocate 50% from the sale of DF Dent
to PrimeCap Odyssey and 50% to T. Rowe Price.
ROLL CALL:
Ayes: 4 – Trustee Kadolph, Trustee Patel, Secretary Caspers, Vice President Feldman
Nays: 0 – None
Absent: 1 – President Torlo. Motion carried.
Mr. Kowalczyk stated that they were informed by MB Financial that it was necessary to keep about
$10,000.00 in cash into the mutual fund account to pay the custodial fees. Ms. Cervantes added that
they had received an over-draft notice and that Lowery instructed MB Financial to take cash out of the
fixed income account to cover the over-draft. Discussion ensued regarding same and agreement to ask
the Village Treasurer about this.
b.MB Financial Investment Management Performance Report on Second Quarter, 2015 (attached)
Mr. Thompson referred to pages 11 and 12 and discussed the Fund’s Performance and Account Activity
Summaries and the Gross and Net Returns as of June 30, 2015. The Portfolio Composition, as listed on
page 11, was:
BOARD OF TRUSTEES OF THE POLICE PENSION FUND
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•Market Value of the Total Fund - $11,992.540
•Fixed Income - $11, 816,591
•Cash and Equivalents - $175,949
Mr. De Meulenaere remarked that regarding the Fixed Income Portfolio Characteristics on page 13, the
rating is lower and lower in credit quality relative to the blended index.
Mr. Thompson then referred to pages 20 and 21, the Bond Ratings Report, and also the Municipal Bonds
on page 22. He also discussed the cash flow graph on page 17, and remarked that there is more cash
flowing out than what is coming in regarding MB’s portfolio. He next talked about the Risk/Return
Analysis on page 18 and remarked that they are taking on a little more risk than the benchmark, but being
rewarded for it.
Trustee Patel requested a report of five years of quarterly returns for the fixed income. Mr. Thompson
agreed to provide this.
c.Approval of Investment Transactions for Second Quarter, 2015
Motion by Secretary Caspers, seconded by Trustee Patel, to approve the Investment Transactions
for the Second Quarter, 2015.
ROLL CALL:
Ayes: 4 – Secretary Caspers, Trustee Patel, Trustee Kadolph, Vice President Feldman
Nays: 0 – None
Absent: 1 – President Torlo. Motion carried.
Lowery and MB Financial representatives exited the meeting at approximately 9:07 p.m.
d.Illinois Department of Insurance findings and discussion/action regarding having Board Attorney
prepare response
Pension Clerk Kane provided a brief background of this item.
Motion by Secretary Caspers, seconded by Trustee Kadolph, to have the Board’s attorney prepare
the response to the Illinois Department of Insurance’s findings. VOICE VOTE: Motion carried.
Pension Clerk Kane stated that the Board’s attorney secured an extension until August 25, 2015 to
respond to the Illinois Department of Insurance (IDOI) findings and that she has gathered much of the
information the response will require. She added that some of the findings will involve correcting Board
practices. Discussion ensued regarding going forward that the Minutes should have the investment
reports attached and that officer elections will occur every July. Vice President Feldman reiterated that he
believes it was prudent to table the Election of Officers’ agenda item at the beginning of this meeting
because of potential important comments the President might want to make. Pension Clerk Kane affirmed
that the discrepancies in active members’ records have been verified with the Village’s payroll department
and will be rectified with Lauterbach & Amen. She affirmed that this information will be included in the
IDOI response.
e.Disability Medical Evaluation Report
Pension Clerk Kane explained that due to a mistaken birth date listed in the Findings and Decision, this
individual was not sent for the annual medical evaluations in 2012, 2013 and 2014, as required for
disabled pension recipients until age 50. She affirmed that he was sent for a medical evaluation in 2015
per the report included in the agenda packet and will be sent in 2016 to comply with the statute, and she
added that this item was brought to her attention when it appeared in the IDOI findings.
10.INFORMATION & UPDATES
a.Fourth quarterly meeting in 2015: October 14, 21, 28, 2015
BOARD OF TRUSTEES OF THE POLICE PENSION FUND
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After brief discussion regarding availability and investment consultants’ ability to provide reports for the third
quarter, October 14, 2015 at 7:00 p.m. was chosen as the fourth quarterly meeting date.
11.ADJOURNMENT:
Motion by Secretary Caspers, seconded by Trustee Kadolph, to adjourn the Board of Trustees of
the Police Pension Fund meeting at 9:26 p.m. VOICE VOTE: Motion carried.
ATTEST:
Edward J. Caspers /s/
Edward J. Caspers, Secretary
Board of Trustees of the Police Pension Fund
BOARD OF TRUSTEES OF THE POLICE PENSION FUND
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