Minutes - 07/25/2012 - Firefighter's Pension Fund BoardMINUTES OF A REGULAR MEETING OF THE BOARD OF TRUSTEES
OAK BROOK FIREFIGHTERS’ PENSION FUND
JULY 25, 2012
A regular meeting of the Board of Trustees of the Oak Brook Firefighters’ Pension Fund was held
on Wednesday, July 25, 2012 at 9:00AM 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 9:02 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: Treasurer Sharon Dangles, David Russell of Investment Performance Services, LLC
(IPS), Robert Thompson and Amber Powers of MB Financial, Allison Barrett and
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 as presented in the board meeting packet. A motion
was made by Trustee Kouba and seconded by Trustee Schlindwein to approve the April 26, 2012
minutes as written. Motion carried unanimously by voice vote.
CONSENT AGENDA
The Board reviewed the second quarter 2012 disbursements Consent Agenda presented in the board
meeting packet. A motion was made by Trustee Fagan and seconded by Trustee Kouba to approve
the Consent Agenda stating net payroll payouts and vendor payouts for April, May and June 2012
of $525,960.49.
AYES: Trustees Erickson, Fagan, Schlindwein, Fleishman and Kouba
NAYES: None
ABSENT: None
The Board addressed trustee training expenses. A motion was made by Trustee Fagan and
seconded by Trustee Kouba to approve payment of registration fees for members interested in
attending the upcoming trustee training conferences.
AYES: Trustees Erickson, Fagan, Schlindwein, Fleishman and Kouba
NAYES: None
ABSENT: None
INVESTMENT PERFORMANCE SERVICES
Mr. Russell distributed copies of the 408(b)(2) disclosure previously emailed to Board members for
their review. Mr. Russell distributed copies of the 06/30/2012 investment performance report and
reviewed it with the Board. As of 06/30/2012, the Fund was down 1.3% for the quarter (up 4.6%
YTD), the total fund market value was $22,832,582. The S&P 500 was down 2.3% for the quarter
(up 7.9% YTD). Investment earnings were down $350,753 for the quarter. Asset allocations were:
total domestic equity 35.9%, total international equity 14.1%, total fixed income 46.5% and total
Oak Brook Firefighters’ Pension Fund
Minutes of Meeting – July 25, 2012
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cash 3.4%. Since inception, January 2010, the portfolio is up 7.2%. Russell commented on the
current market conditions and that no predictions are possible for the rest of the year performance.
No current concerns at this time, with only one exception, Westcore Select, which has a large cap
bias, meaning it is more conservative. The Board reviewed the Westcore Select account, which has
underperformed since inception (October 2011) reporting a 3.5% return versus the Russell MidCap
Growth benchmark performance of 20.3%. Mr. Russell stated that technology stocks are down for
the quarter but are the highest return year-to-date. IPS will keep a close watch over Westcore Select
and if further analysis deems more concern by the next quarter, options will be provided. IPS will
analyze all security holdings and trading patterns. Mr. Russell reviewed the quarterly compliance
report and the Fixed Income Separate Account Quarterly Compliance Checklist; no exceptions were
noted.
Ms. Barrett left the meeting at 10:05 a.m.
Mr. Thompson and Ms. Powers distributed the Fixed Income Securities performance report as of
06/30/2012, stating the total fund was up 1.54% for the latest quarter and up 2.28 for the fiscal year-
to-date. The benchmark performance was up 2.73% for the latest quarter and up 1.59% for the
fiscal year-to-date. The change due to investment was up $162,768 and the ending market value
was $10,620.952. The Board discussed one holding, Noble Holding International.
Ms. Dangles left the meeting momentarily at 10:20 a.m. and returned at 10:45 a.m.
A motion was made by Trustee Fagan and seconded by Trustee Kouba to liquidate Noble Holdings
International.
AYES: Trustees Fagan, Fleishman and Kouba
NAYES: Trustees Erickson and Schlindwein
ABSENT: None
A motion was made by Trustee Schlindwein and seconded by Trustee Fagan to direct MB Financial
to purchase only U.S. Bonds issued by corporations domiciled in the U.S.
AYES: Trustees Kouba, Schlindwein and Fagan
NAYES: Trustee Fleishman
ABSENT: None
UNDECIDED: Trustee Erickson
The Board requested recommendations from IPS and MB Financial for discussion at the October
meeting.
Mr. Russell distributed copies of the current investment policy and reviewed the allocations per
prior meeting decisions regarding Appendix A & B. A motion was made by Trustee Fagan and
seconded by Trustee Kouba to direct MB Financial to rebalance to the fixed income portfolio and to
buy sufficient funds to raise the GTAA up to a 10% allocation.
AYES: Trustees Erickson, Fagan, Schlindwein, Fleishman and Kouba
NAYES: None
ABSENT: None
A motion was made by Trustee Kouba and seconded by Trustee Fagan to accept the investment
reports as presented. Motion carried unanimously by voice vote.
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Minutes of Meeting – July 25, 2012
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The Board meeting took a recess at 11:14 a.m., and the MB Financial representatives left the
meeting. The Board reconvened at 11:22 a.m. with all Board members present and included Ms.
Dangles, Mr. Russell and Ms. Davis.
The Board agreed to table discussion about the Administrative Rules and Regulations until further
review.
The Board discussed the Request for Proposal (RFP) for actuarial services and submitted the
proposals from Foster & Foster for $3,500, L&A for $2,150 and Tepfer for $3,000. The Board
agreed that their preference would be to meet and talk to each actuary prior to making their
decision. Ms. Davis was directed to invite each of the actuaries to the next meeting in October and
request they address the following: (1) what assumptions are used for the actuarial report, and (2) if
they are available for meeting attendance to discuss preparation for the report and/or the final
actuarial report, does an additional fee apply? A motion was made by Trustee Fleishman and
seconded by Trustee Kouba to ask all three actuaries to be present at the October meeting. Motion
carried unanimously by voice vote.
NEW BUSINESS
The Board discussed a request for creditable service reciprocity for Mr. Rick Sander. L&A’s
06/14/2012 letter to Mr. Sander reviewed the amount due to Oak Brook Firefighters’ Pension Fund
to combine his creditable service and the procedures to do so. Records indicated that Mr. Sander’s
service with Oak Brook Fire was from August 23, 1987 through September 2, 1990 and that he had
received his contributions of $7,849.63 as a refund. The Board will wait for a response from Mr.
Sanders, no further action at this time.
The Board discussed a request received from Mr. Mark Schoppe to determine benefits, no final date
of employment was stated, he is currently on sick time. No further action at this time.
The Board determined what disabled members, 50 years of age and under, are required to have an
annual medical exam. Mr. Paul Jacobs has already scheduled his August 3rd exam; Sean Smyth
lives in Florida and the Board was informed that his previous doctor is no longer practicing. Mr.
Fagan researched the Florida Board of Health for referrals and found IMCS, which is at a cost of
$1,750 and more costly than before, but this will be the last year Mr. Smyth is required to have an
annual exam. The Board noted that a consideration for the rules and regulations may be to state that
annual medical exams will be conducted in Illinois (or within 50 miles of Illinois) only thru INSPE.
Mr. Russell left the meeting at 11:56 a.m.
A motion was made by Trustee Fleishman and seconded by Trustee Kouba to approve expenses, not
to exceed $2,000 for the annual medical examination for Sean Smyth, based on Trustee Fagan’s
research.
AYES: Trustees Erickson, Fagan, Schlindwein, Fleishman and Kouba
NAYES: None
ABSENT: None
Trustee Fagan will send the certified letters to the agency and to Mr. Smyth to begin the process.
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Minutes of Meeting – July 25, 2012
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The Board discussed the acceptance of Jake Arzer’s new member application. A motion was made
by Trustee Fagan and seconded by Trustee Fleishman to approve Jake Arzer’s new member
application to the Pension Fund; Mr. Arzer’s date of hire was 05/08/2012 and he is a tier two status.
Motion carried unanimously by voice vote.
INFORMATION & UPDATES
The Board noted the following informational items:
Affidavits of continued eligibility were mailed to pensioners along with their June pension
benefits; compliance results to follow at the October meeting.
Trustee training summary was reviewed and Open Meetings Act (OMA) training discussed;
Ms. Davis will email the Board the newsletter for legal updates from Reimer & Assoc. for
the Board to review. Plans to complete training requirements were discussed.
Requesting records inventory from the Illinois State Archives was discussed. A motion was
made by Trustee Fagan and seconded by Trustee Schlindwein to contact the state archives
for an inventory review. Motion carried unanimously by voice vote.
EXECUTIVE CLOSED SESSION – The Board agreed there was no need to hold a closed
session.
ADJOURNMENT
A motion was made by Trustee Schlindwein and seconded by Trustee Fleishman to adjourn the
meeting at 12:28 p.m. Motion carried unanimously by voice vote.
Respectfully submitted,
Attest: Michael Erickson, President
John Fagan, Secretary
Minutes prepared by Pension Services Administrator, Becky Davis