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Minutes - 04/29/2015 - Firefighter's Pension Fund BoardMINUTES OF A REGULAR MEETING OF THE BOARD OF TRUSTEES OAK BROOK FIREFIGHTERS’ PENSION FUND April 29, 2015 A regular meeting of the Board of Trustees of the Oak Brook Firefighters’ Pension Fund was held on Wednesday, April 29, 2015 at 9:00 a.m., at the Butler Government Center, Upper Level Conference 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 9:05 a.m. ROLL CALL Upon roll call the following answered: Present: President Michael Erickson, Trustee Timothy Schlindwein and Trustee George Kouba Absent: Secretary John Fagan and Trustee Mark Fleishman Also Present: Treasurer Sharon Dangles; Spencer Klein of MB Financial; Lisa Barnaby and Becky Davis of Lauterbach & Amen, LLP (L&A); David Russell of Investment Performance Services, LLC (via conference call); Village Trustee Baar (arrived later) PUBLIC COMMENT – There was no public comment. 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 Schlindwein to approve the 01/29/2015 regular meeting minutes, as written. Motion carried by unanimous voice vote. • A motion was made by Trustee Schlindwein and seconded by Trustee Erickson to approve the 03/03/2015 special meeting minutes, as written. Motion carried by unanimous voice vote. INVESTMENT PERFORMANCE SERVICES Mr. Russell joined the meeting via conference call at 9:08 a.m. The quarterly investment report was discussed and reviewed. Mr. Russell reviewed the first quarter market discussion points: interest rates went down slightly, the official unemployment rate is down to 5.5%, growth funds did well, the Russell 1000 Value was down 0.7%, the International Equity Market (MSCI-EAFE) rallied strongly in the first quarter, and the Bond Market interest rates continued to flatten with lower rates. As of 03/31/2015, the ending market value was $25,326,410; the total fund performance was 2.4% for the quarter, 5.8% for one year, 6.3% for three years, and 7.0% for five years. The benchmark performance was 2.1% for the quarter, 6.5% for one year, 7.6% for three years, and 8.3% for five years. Since inception (January 2010), the portfolio return was 7.3%, and the benchmark return was 8.6%. Investment earnings were $591,166 for the quarter. The asset allocations were: Domestic Equity 23.7%, International Equity 14.0%, Fixed Income 41.2%, REIT Mutual Funds 12.4%, Global Tactical Asset Allocation 8.2%, and total Cash 0.5%. Mr. Russell indicated that all managers are in compliance and that rebalancing is not necessary at this time. For the next agenda, Mr. Russell recommended that the Board consider raising the equity target allocation from 55% to 65%. The Board agreed to discuss increasing the equity target and the potential to move more into the International Equity market for possible action at the next meeting. Mr. Klein introduced himself to the Board and Mr. Russell. Mr. Klein will be the MB Financial portfolio manager going forward. Mr. Russell’s conference call ended at 9:43 a.m. Oak Brook Firefighters’ Pension Fund Minutes of Meeting – April 29, 2015 Page 2 of 4 Mr. Klein distributed and reviewed the MB Financial quarterly report. As of 03/31/2015, the total fund market value was $10,437,869 with 95.37% in fixed income and 4.63% in cash and equivalent. The net gains and earned income totaled $113,995, and the effective duration of the fixed income portfolio was 2.43 years. For the next agenda, the Board discussed the potential to loosen the effective duration out to three or four years to capture more yield, and the potential to invest more into investment grade corporate bonds for possible action at the next meeting. Mr. Klein was asked to prepare a cash flow match on the withdrawals without taking the duration to five years. The Board discussed Mr. Klein’s credentials and if there were any changes in MB’s staffing since the merger between MB and Cole Taylor. A motion was made by Trustee Schlindwein and seconded by Trustee Kouba to accept the investment report as presented. Motion carried by unanimous voice vote. The Board took a break at 10:16 a.m. and reconvened at 10:24 a.m. Mr. Klein was excused and left the meeting at 10:24 a.m. Present: President Michael Erickson, Trustee Timothy Schlindwein and Trustee George Kouba Absent: Secretary John Fagan and Trustee Mark Fleishman Also Present: Treasurer Sharon Dangles; Lisa Barnaby and Becky Davis of Lauterbach & Amen, LLP (L&A) ACCOUNTANT’S REPORT L&A reported that the 12/31/2014 actuarial report was filed with the DOI on 03/20/2015; confirmation that the report was uploaded to the DOI system was received on 03/23/2015. The Board reviewed the draft DOI Annual Statement and Interrogatories and agreed that there no corrections needed. The final DOI Annual Statement and Certification Form will be sent to the Board and Treasurer to be executed as soon as possible; the DOI will not allow any extensions, so the Certification Form must be received at the DOI, on or before 06/30/2015. L&A announced that they will be converting to a new payroll software system and that the transition would occur from March to September 2015; a notice of the changes and improvements the pensioners will receive was provided in the Board meeting packet. The Board reviewed the financial report summary presented in the Board meeting packet. For the three months ended 03/31/2015, the net position held in trust for pension benefits was $25,405,129.94. A motion was made by Trustee Schlindwein and seconded by Trustee Kouba to accept the 03/31/2015 financial report as prepared by L&A. Motion carried by unanimous voice vote. Next month, it was requested that the Board packet also include the Cash Analysis Report from the monthly financial report. The Board reviewed the Warrant List of disbursements and Vendor Checks Report presented in the Board meeting packet. A motion was made by Trustee Kouba and seconded by Trustee Schlindwein to approve the net payroll payouts and vendor payouts for January, February and March 2015. The vendor payouts totaled $116,864.75 (see attached detail). AYES: Trustees Erickson, Schlindwein and Kouba NAYS: None ABSENT: Trustees Fagan and Fleishman Oak Brook Firefighters’ Pension Fund Minutes of Meeting – April 29, 2015 Page 3 of 4 INFORMATIONAL ITEMS AND UNFINISHED BUSINESS • Trustee Training Summary: all Trustees will attend the IPFA 2015 spring pension seminar on 05/01/2015 in Addison, IL, and will submit their training certificates upon receipt. • FOIA/OMA designee to complete online training: Trustee Erickson is the FOIA and OMA designee and agreed to complete the online training as soon as possible. • Update on DOI compliance audit, response to Summary of Findings: the Board indicated that the DOI Compliance Officer, Su Chen Yang, has not yet completed the final report. Follow up on this topic will be discussed at the next meeting. • Statements of Economic Interest (SEI): all Trustees indicated that they completed their SEI prior to the 05/01/2015 due date. NEW BUSINESS The Board acknowledged the 02/08/2015 death of pensioner James E. Clark; his surviving spouse is Ruth Clark. The Board reviewed the surviving spouse pension calculation worksheet prepared by L&A. A motion was made by Trustee Kouba and seconded by Trustee Schlindwein to approve surviving spouse benefits to Ruth Clark, effective 02/09/2015, at a monthly pension amount of $4,963.93. AYES: Trustees Erickson, Schlindwein and Kouba NAYS: None ABSENT: Trustee Fagan and Fleishman The Board reviewed the retirement benefit calculation for Battalion Chief Thomas Stanfa, prepared by L&A. A motion was made by Trustee Schlindwein and seconded by Trustee Kouba to approve the retirement calculation for Thomas Stanfa, as follows: his date of entry was 07/09/1978, his retirement date was 03/26/2015, the effective date of his pension was 03/27/2015; his age at retirement is 63 years old, he has 36 years and 8 months of creditable service earned, at 75% of his applicable salary of $104,223.34, the amount of his originally granted monthly pension is $6,513.96, until his first increase in April 2016. AYES: Trustees Erickson, Schlindwein and Kouba NAYS: None ABSENT: Trustee Fagan and Fleishman The Board reviewed the retirement calculation and combination between Funds for Robert V. Robertson (Franklin Park Fire), prepared by L&A. A motion was made by Trustee Kouba and seconded by Trustee Schlindwein to approve the retirement calculation for Robert V. Robertson, as follows: his date of entry was 02/21/1988, his termination date was 04/02/2015, the effective date of his combined retirement is 04/03/2015; his age at retirement is 61 years old, he has 32 years and one month of combined creditable service earned, at 75% of his applicable salary of $84,507.00, the amount of the Oak Brook Firefighters’ Pension Fund portion of his originally granted monthly pension is $4,986.63 until his first increase in May 2016. AYES: Trustees Erickson, Schlindwein and Kouba NAYS: None ABSENT: Trustee Fagan and Fleishman The Board acknowledged the 04/12/2015 death of pensioner Francis J. Pine; his surviving spouse is Joanna Pine. The Board reviewed the surviving spouse pension calculation worksheet prepared by L&A. A motion was made by Trustee Schlindwein and seconded by Trustee Kouba to approve surviving spouse benefits to Joanne F. Pine, effective 04/13/2015, at a monthly pension amount of $4,672.46. AYES: Trustees Erickson, Schlindwein and Kouba NAYS: None ABSENT: Trustee Fagan and Fleishman Oak Brook Firefighters’ Pension Fund Minutes of Meeting – April 29, 2015 Page 4 of 4 The Board discussed the newly hired Firefighter. A motion was made by Trustee Schlindwein and seconded by Trustee Kouba to accept Scott Kurczewski into the Fund; his date of hire was 04/08/2015 and has Tier 2 status. Motion carried by unanimous voice vote. The Board discussed the recovery of an overpayment to pensioner, William Garrigan, which was due to an incorrect birth date given for his non-handicapped dependent. L&A determined that additional dependent benefits were remitted to Mr. Garrigan through January 2015, although his daughter (Amanda) turned 18 in 2011. L&A calculated the amount of his overpayment to be $1,027.93 (as of 04/29/2015). A motion was made by Trustee Schlindwein and seconded by Trustee Erickson to forgo charging interest on the overpayment, and directed L&A to send Mr. Garrigan a letter explaining the following options: payment can be made in full directly to the Fund, or L&A will deduct $26.12 from his monthly pension payment until the overpayment is repaid in full. AYES: Trustees Erickson, Schlindwein and Kouba NAYS: None ABSENT: Trustee Fagan and Fleishman The Board discussed the election results for the active and retired member positions. Active member: John Fagan ran unopposed and was elected by acclamation. Retired member: Mark Fleishman ran unopposed and was elected by acclamation. A motion was made by Trustee Kouba and seconded by Trustee Schlindwein to certify the election results electing John Fagan and Mark Fleishman to the Board of Trustees, for a three year term ending 04/30/2018. Motion carried by unanimous voice vote. The Board discussed the reappointment of Trustee Schlindwein. The Village Council recently reappointed Trustee Schlindwein to a three year term ending 04/30/2018. The Board discussed the Board Officer elections for the positions of President and Secretary. A motion was made by Trustee Kouba and seconded by Trustee Schlindwein to retain the current slate of Officers, as follows: President Michael Erickson, Secretary John Fagan. Motion carried by unanimous voice vote. Village Trustee Barr joined the meeting at 11:09 a.m. The Board discussed the annual DOI Compliance fee invoice. A motion was made by Trustee Erickson and seconded by Trustee Schlindwein to authorize the payment of the DOI Compliance fee invoice, upon receipt. AYES: Trustees Erickson, Schlindwein and Kouba NAYS: None ABSENT: Trustee Fagan and Fleishman The next regular meeting is scheduled for July 29, 2015 at 9:00 a.m. (8:00 a.m. for Trustee training). CLOSED SESSION – There was no closed session. ADJOURNMENT A motion was made by Trustee Schlindwein and seconded by Trustee Kouba to adjourn the meeting at 11:13 a.m. Motion carried by unanimous voice vote. Respectfully submitted, Michael Erickson, President John Fagan, Secretary Minutes prepared by Pension Services Administrator, Becky Davis Oak Brook Firefighters' Pension Fund OAKBRKFIREAll Checkbooks Vendor Checks Report Page 101/01/15-03/31/15 04/21/15 02:12 PM Vendor NameChk. No.Check DateAmount LAUTERBACH & AMEN, LLP2015401/16/153,000.00 REIMER DOBROVOLNY & KARLSON LLC2015501/16/151,429.86 Subtotal4,429.86 OAK BROOK BANK/IRS-EFTPS1256401/30/1519,034.84 VILLAGE OF OAK BROOK409501/30/1510,604.87 Subtotal29,639.71 OAK BROOK BANK/IRS-EFTPS1256602/02/151,005.62 IPFA2015602/12/15730.00 REIMER DOBROVOLNY & KARLSON LLC2015702/12/1575.00 Subtotal805.00 OAK BROOK BANK/IRS-EFTPS1260802/27/1519,190.81 VILLAGE OF OAK BROOK1261302/27/1510,734.03 Subtotal29,924.84 INVESTMENT PERFORMANCE SERVICES,2015803/30/158,760.96 LAUTERBACH & AMEN, LLP2015903/30/153,610.00 VLG OF OAK BROOK*2016003/30/15605.00 Subtotal12,975.96 MB FINANCIAL BANK5006303/31/151,270.20 MB FINANCIAL BANK5006203/31/156,496.74 OAK BROOK BANK/IRS-EFTPS1265503/31/1519,582.79 VILLAGE OF OAK BROOK1266003/31/1510,734.03 Subtotal38,083.76 TOTAL116,864.75