Minutes - 10/26/2011 - Police Pension Fund BoardVILLAGE OF OAK BROOK
BOARD OF TRUSTEES OF THE POLICE PENSION FUND - Minutes
UNOFFICIAL UNTIL APPROVED AS WRITTEN
OR AS AMENDED X BY BOARD OF TRUSTEES OF THE
POLICE PENSION FUND ON February 8, 2012
1. CALL TO ORDER:
The Regular Meeting of the Board of Trustees of the Oak Brook Police Pension Fund was called to order.
by President Torlo at 7:07 p.m. in the Samuel E. Dean Board 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: President Vel Torlo, Vice President Robert Birdsall, Secretary Alan Feldman, Trustee
Edward Caspers, Trustee Hitesh Patel
ABSENT: None
IN ATTENDANCE: Finance Director Sharon Dangles, Gerald Wolin, Phillip Kosmala, Lowery Asset
Consulting, LLC , and Robert Thompson, MB Financial
3. PRESIDENT'S COMMENTS: None
4. APPROVAL OF MINUTES:
a. Approval of Board of Trustees Regular Meeting Minutes of July 27, 2011
Secretary Feldman requested that the July 27, 2011 Minutes be amended to include a financial summary of
the previous quarter and going forward on each set of Minutes showing what happened during the quarter
and year -to -date.
Motion by Vice President Birdsall, seconded by Trustee Caspers, to approve the Minutes of the July
27, 2011 Regular Board Meeting as amended. VOICE VOTE: Motion carried.
5 CONSENTAGENDA:
All items on the Consent Agenda are considered to be routine in nature and will be enacted in one motion.
Motion by Trustee Patel, seconded by Vice President Birdsall, to approve the Consent Agenda.
ROLL CALL:
Ayes: 6 — President Torlo, Secretary Feldman, Trustee Caspers, Trustee Patel , Vice President Birdsall
Nays: 0 — None
Absent: 0 — Motion carried.
a. Approval of July 1 -31, 2011 checks in the total amount of $156,231.42
b. Approval of August 1 -31, 2011 checks in the total amount of $171,243.92
c. Approval of September 1 -30, 2011 checks in the total amount of $157,856.42
d. Approval of Lowery Asset Consulting, LLC's invoice in the amount of $7,000.00, dated
August 31, 2011
e. Approval of Mesirow Insurance Services' invoice in the amount of $3,625.00 for Fiduciary
Insurance for the period of August 1, 2011 through August 1,2012
f. Approval of Contravisory Investment Management, Inc. invoice for the period July 1 —
September 30, 2011 in the amount of $2,960.00
g. Approval of Lauterbach & Amen, LLP's invoices in the total amount of $2,775.00, for services
in May, June and July, 2011
BOARD OF TRUSTEES OF THE POLICE PENSION FUND
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October 26, 2011
h. Approval of Reimbursement to Pension Clerk Kane for Illinois Public Pension Fund Association
Conference Registrations (Patel and Torlo) in the total amount of $700.00
i. Approval of Richard J. Reimer & Associates, LLC's invoice in the amount of $87.50
6. ITEMS REMOVED FROM CONSENT AGENDA. None presented.
7. UNFINISHED BUSINESS: None presented.
8. NEW BUSINESS:
Lowery Asset Consulting, LLC /MB Financial Investment Management Performance Reports for
Third Quarter, 2011
Phil Kosmala, of Lowery Asset Consulting, LLC, discussed that the market has been pricing in three
catastrophic events — double -dip recession, the implosion of Continental Europe and a slow down of growth
in China. He stated that the Pension Fund outperformed the blended benchmark by 33 basis points in the
third quarter with a return of -6.4 %; the Fund beat the benchmark year -to -date returning -2.6% and for the
one year period with a return of 0.4% by 65 basis points and 90 basis points, respectively. Through
October 24th, he explained that the Fund was up 1.8% as the market rebounded since the end of the
quarter and added that Eaton Vance Large Cap Value has underperformed, even in a market environment
in which defensive large cap companies have performed well.
After reviewing three replacement candidates, the trustees selected Ridgeworth Large Cap Value to
replace the Eaton Vance fund. The Executive Summary also stated that the Fund's equity allocation
(38 %) is currently below its 40% target and through the last two years and three quarters, the Pension
Fund produced an annualized return of 6.4 %. He said since the last meeting, they had revised the target
equity allocation to 45 %, but that was shown in the Executive Summary. He discussed the Large and
Small Cap Indexes on page 3 of the Third Quarter Performance Report. Mr. Kosmala discussed the high
dividend yielding stocks and value managers such as Ridgeworth, an asset arm of Sun Trust
James Hrabak of MB Financial entered the meeting at approximately 7:25 p.m.
Trustee Patel expressed concerns about the Fund's fixed income risk exposure
Robert Thompson, of MB Financial, handed out a Performance Report as of September 30, 2011 and
James Hrabak, of MB Financial, discussed the blended benchmark of the bond portfolio, the underweight
treasury bonds and interest rates. Lengthy discussion ensued.
b. Approval of Investment Transactions for Third Quarter, 2011
Motion by Trustee Patel, seconded by Vice President Birdsall, to approve the Investment
Transactions from April 1 through June 30, 2011.
ROLL CALL:
Ayes: 6 — Secretary Feldman, Trustee Caspers, Trustee Patel, Vice President Birdsall, President Torlo
Nays: 0 — None
Absent: 0 — None. Motion carried
Motion by Trustee Patel, seconded by Trustee Caspers, to recommend changing Eaton Vance Fund
Assets to Ridgeworth Large Cap Value Equity Fund.
ROLL CALL:
Ayes: 6 — Trustee Caspers, Trustee Patel, Vice President Birdsall, President Torlo, Secretary Feldman
Nays: 0 — None
Absent: 0 — None. Motion carried
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October 26, 2011
c. Discussion regarding Actuarial Assumptions for Third Quarter, 2011
Trustee Patel requested the Todd Schroeder of Lauterbach & Amen provide actuarial assumptions prior to
the February, 2012 meeting in order to address any questions in order to make an informed decision.
Gerald Wolin (Village Board Trustee) queried regarding the assumptions since the Village Board will need
for working on the budget. Finance Director Dangles stated that typically the actuary has to wait until after
the first of the year to obtain the results and the Village Board does not vote on the assumptions in April or
May, with adjustments as necessary. Trustee Patel discussed the changes in rules made by the State and
the reason that the Police Pension Fund decided to change actuaries. Consensus to table this agenda
item to the February, 2012 meeting.
d. Discussion regarding concerns of pension recipient
Discussion ensued regarding the pension recipient's concerns about the percentage of the Police Pension
Fund's funding and the recipient's wishes to have the Pension Board sue the Village Board to force a
higher percentage of funding by implementing a property tax. Vice President Birdsall informed the Board
that by 2045 according to current State legislation all pension funds will have to be 100% funded. He
stated that he and President Torlo were planning on speaking with this individual and discussed that
although the Police Pension Fund was funded higher than it is currently, it must be taken into account the
current legislative restrictions /requirements and the fact that many of the current retirees are earning at a
much higher rate than in the past. It was mentioned that no other retirees have contacted any members of
the Board regarding this matter.
e. Determination of 2012 Meeting Schedule
Motion by Trustee Caspers, seconded by Vice President Birdsall, to maintain the existing meeting
schedule model in 2011 for 2012.
ROLL CALL:
Ayes: 6 — Trustee Patel, Vice President Birdsall, President Torlo, Secretary Feldman, Trustee Caspers,
Nays: 0 — None
Absent: 0 — None. Motion carried
9. INFORMATION & UPDATES:
a. Scheduling of first quarterly meeting in 2012
Agreement to set first quarterly meeting for 7:00 p.m. on February 8, 2012. Vice President Birdsall brought
up that he learned during recent trustee training that pension fund board meetings are to take place in
specific months in each quarter. He stated that the first quarterly meeting should occur in January, but
could call a special meeting in February because of waiting for the actuarial results. He and Trustee Patel
stated that the meetings should occur in the first, fourth, seventh and tenth months of the year: January,
April, July and October. Discussion ensued regarding trustee training.
10. ADJOURNMENT:
Motion by Trustee Caspers, seconded by Trustee Patel, to adjourn the Board of Trustees of the Police
Pension Fund Board meeting at 8:20 p.m. VOICE VOTE: Motion carried.
ATTEST:
Alan Feldman /s/
Alan Feldman, Secretary
Board of Trustees of the Police Pension Fund
BOARD OF TRUSTEES OF THE POLICE PENSION FUND
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October 26, 2011