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Minutes - 07/29/2015 - Firefighter's Pension Fund BoardMINUTES OF A REGULAR MEETING OF THE BOARD OF TRUSTEES OAK BROOK FIREFIGHTERS’ PENSION FUND July 29, 2015 A regular meeting of the Board of Trustees of the Oak Brook Firefighters’ Pension Fund was held on Wednesday, July 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: Secretary John Fagan called the meeting to order at 9:07 a.m. ROLL CALL: Upon roll call the following answered: Present: Trustee John Fagan, Trustee Mark Fleishman, Trustee Timothy Schlindwein and Trustee George Kouba Absent: Trustee Michael Erickson Also Present: Treasurer Sharon Dangles; David Russell of Investment Performance Services, LLC; Spencer Klein and Robert Thompson of MB Financial; Becky Davis and Cheryl Kessler of Lauterbach & Amen, LLP (L&A) 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 04/29/2015 regular meeting minutes, as written. Motion carried by unanimous voice vote. Semi-Annual Review of Closed Session Meeting Minutes: There were no closed meeting minutes to review. INVESTMENT REPORT: David Russell, Investment Performance Services, LLC Review and accept quarterly investment report, potential purchase and/or sale of securities, potential portfolio balancing and/or hiring or termination of investment managers: The quarterly investment report was discussed and reviewed. As of 06/30/2015, the ending market value was $24,592,607; the gross total fund performance was -1.4% for the second quarter, 1.6% for one year, 6.3% for three years, and 7.3% for five years. The benchmark performance was 1.1% for the second quarter, 2.0% for one year, 7.3% for three years, and 8.8% for five years. Since inception (January, 2010), the portfolio return was 6.7%, and the benchmark return was 8.0%. Investment earnings were -$342,131 for the second quarter. The asset allocations were: Domestic Equity 24.2%, International Equity 14.6%, Fixed Income 40.8%, REIT Mutual Funds 11.4%, Global Tactical Asset Allocation 8.5%, and total Cash 0.5%. Mr. Russell indicated that all managers are in compliance and that rebalancing is not necessary at this time. Review of asset allocation alternatives: David Russell provided an Asset Allocation Review dated July 29, 2015. This review illustrated the Pension Fund’s current asset allocation compared to four alternative options: More Equity, More REITS, Add HY and REIT and HY. All assumptions provided are for the same 2 ½ years. Mr. Russell provided recommendations and a comparison of the forecasted risks and returns for the current and alternative allocations and the Board discussed the options presented. The Board directed Mr. Russell to provide a recommended asset allocation change with specific fund choices for discussion at the next meeting. Oak Brook Firefighters’ Pension Fund Minutes of Meeting – July 29, 2015 Page 2 of 3 A motion was made by Trustee Fagan and seconded by Trustee Schlindwein to discuss, at the next meeting, adding equity and high yield options for allocation and to eliminate any discussion of additional REITS or the REIT + High Yield option. Motion carried by unanimous voice vote A motion was made by Trustee Schlindwein and seconded by Trustee Fleishman to accept the investment report as presented. Motion carried by unanimous voice vote. MB Financial presentation of cash flow match on withdrawals: Mr. Klein distributed and reviewed the MB Financial quarterly report. As of 06/30/2015, the total fund market value was $10,033,864 with 97.61% in fixed income and 2.39% in cash and equivalent. The net gains and earned income totaled -$6,042, and the effective duration of the fixed income portfolio was 2.54 years. David Russell, Spencer Klein and Robert Thompson left the meeting at 10:47 a.m. The Board took a break at 10:47 a.m. and reconvened at 10:57 a.m. Present: Trustees Fagan, Fleishman, Schlindwein and Kouba Absent: Trustee Michael Erickson Also Present: Treasurer Sharon Dangles; Becky Davis and Cheryl Kessler of Lauterbach & Amen, LLP (L&A) ACCOUNTANT’S REPORT: The Board noted that the Certification form was filed with the DOI on 5/27/15. Review and accept monthly report: The Board reviewed the financial report summary presented in the Board packet. For the six months ended 06/30/2015, the net position held in trust for pension benefits was $24,702,195.29. A motion was made by Trustee Fagan and seconded by Trustee Kouba to accept the 06/30/2015 financial report as prepared by L&A. Motion carried by unanimous voice vote. Approve Warrant List/Vendor checks report: The Board reviewed the Cash Analysis Report and Vendor Checks Report presented in the Board meeting packet. A motion was made by Trustee Fagan and seconded by Trustee Fleishman to approve the net payroll payouts and vendor payouts for April, May and June 2015. The vendor payouts totaled $125,507.02 (see attached detail). AYES: Trustees Fagan, Fleishman, Schlindwein and Kouba NAYS: None ABSENT: Trustee Erickson INFORMATIONAL ITEMS AND UNFINISHED BUSINESS: • Trustee Training Summary: The Trustees reviewed the current Trustee training summary. Today’s hour will be added and all Trustees were reminded to send certificates of hours earned. A motion was made by Trustee Fagan and seconded by Trustee Schlindwein to approve expenses associated with all trustee training until the end of 2015. AYES: Trustees Fagan, Fleishman, Schlindwein and Kouba NAYS: None ABSENT: Trustee Erickson • Annual Affidavits: The Board was informed that L&A mailed the Annual Affidavits to pensioners in June, 2015. A status as of 7/20/15 was provided. Another status report will be provided at the next meeting and the Board will discuss missing affidavits, if any. • Review and update active member files: The Fund’s pension files were reviewed by the DOI during the recent Compliance Audit and the pension files will be updated, as needed, by the fund. Oak Brook Firefighters’ Pension Fund Minutes of Meeting – July 29, 2015 Page 3 of 3 • Conduct Annual Medical Evaluation of disabled members: The Board was informed that there is one disabled member, Jennifer White, who is due for her first annual medical evaluation in October, 2015. A letter will be sent to Ms. White regarding her medical evaluation through INSPE. A motion was made by Trustee Fagan and seconded by Trustee Fleishman to contact Jennifer White for her annual medical evaluation with the service to be provided by INSPE. AYES: Trustees Fagan, Fleishman, Schlindwein and Kouba NAYS: None ABSENT: Trustee Erickson NEW BUSINESS: Response to IDOI Compliance Audit – Summary of Findings: The IDOI Compliance Audit was sent to Rick Reimer for review. Mr. Reimer reported that there were no major discrepancies and he has requested an extension to October 30, 2015. Trustee Fagan is gathering requested information and missing documentation. A follow-up on the Board’s response to the Summary of Findings will be discussed at the next meeting. Discuss/Approve RFP requests for Investment Consultant Services: The Board discussed the preparations for a request for proposal. Rick Reimer’s office will be contacted regarding the requirements for a request for proposal and a special meeting may be scheduled to move forward with the process. Trustee Fleishman left the meeting at 12:06 p.m. Review DOI Actuarial Valuation Report: The report was distributed to the Board for its records. The next regular meeting is scheduled for October 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 Fagan and seconded by Trustee Kouba to adjourn the meeting at 12:11 p.m. Motion carried by unanimous voice vote. Respectfully submitted, Michael Erickson, President John Fagan, Secretary Minutes prepared by Pension Services Administrator, Cheryl Kessler