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Minutes - 10/24/2013 - Firefighter's Pension Fund Board MINUTES OF A REGULAR MEETING OF THE BOARD OF TRUSTEES OAK BROOK FIREFIGHTERS' PENSION FUND October 24, 2013 A regular meeting of the Board of Trustees of the Oak Brook Firefighters' Pension Fund was held on Thursday, October 24, 2013 at 9:00 a.m.,at the Butler Government Center, West Wing 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 9:04 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: Village Trustee Don Adler;David Russell of Investment Performance Services,LLC(IPS); Robert Thompson and Amber Powers of MB Financial; Treasurer Sharon Dangles; Becky Davis of Lauterbach&Amen, LLP(L&A) PUBLIC COMMENT—There was no public comment made at this time. 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 Fagan to approve the July 16, 2013 minutes as written. Motion carried by unanimous voice vote. ACCOUNTANT'S REPORT The Board reviewed the 12/31/2012 Foster&Foster Actuarial Report. A motion was made by Trustee Schlindwein and seconded by Trustee Fleishman to accept the 12/31/2012 actuarial report as presented,and based on that report, adopt the tax levy recommendation to the Village in the amount of$1,626,145. AYES: Trustees Erickson,Fagan,Fleishman, Schlindwein and Kouba NAYS: None ABSENT: None The Board discussed the Municipal Compliance Report(MCR), and the differences between the different actuarial reports used by the Village(Tim Sharpe),the Fund(Foster&Foster),and the Department of Insurance(DOI). A motion was made by Trustee Schlindwein and seconded by Trustee Kouba to accept the MCR as presented. AYES: Trustees Erickson,Fleishman, Schlindwein and Kouba NAYS: Trustee Fagan ABSENT: None The Board discussed reaching out to the DOI for an explanation or interpretation regarding the amounts reflected in the MCR versus the amount that the Village has already agreed to levy for the Fire Pension Fund. Treasurer Dangles will contact the DOI and follow up with the Board. Post Meeting note: It was determined by the DOI that the MCR can include all three sources of actuarial information. The MCR was revised as requested, and will be reviewed by the Board for its approval at the next meeting, which will be the 1210212013 disability hearing. The Board reviewed the financial report summary presented in the board meeting packet. For the nine months ended 09/30/2013,the net position held in trust for pension benefits was$24,005,239.49. A motion was made by Trustee Kouba and seconded by Trustee Schlindwein to accept the 09/30/2013 financial report as prepared by L&A. Motion carried by unanimous voice vote. The Board reviewed the disbursements presented in the board meeting packet. A motion was made by Trustee Fleishman and seconded by Trustee Kouba to approve the net payroll payouts and vendor payouts for July,August and September 2013. The vendor payouts totaled$95,570.27 (see attached detail). AYES: Trustees Erickson,Fagan,Fleishman, Schlindwein and Kouba Oak Brook Firefighters'Pension Fund Minutes of Meeting—October 24,2013 Page 2 of 4 NAYS: None ABSENT: None INVESTMENT PERFORMANCE SERVICES Mr. Russell distributed the quarterly investment report and reviewed it with the Board. As of 09/30/2013,the Fund was up 3.0%for the quarter, and the ending market value was $23,917,621. The portfolio return was comparable to the benchmark which was up 3.1%for the quarter. Investment earnings were up$645,284,and asset allocations were: domestic equity 40.7%, international equity 15.9%,total fixed income 39.7°/x, and total cash 3.6%. Year-to- date the portfolio was up 5.6%and reported a 7.0%return for the three year performance. Mr. Russell discussed the performance summary,the quarterly compliance report and his recommendations to rebalance the asset allocations. A motion was made by Trustee Schlindwein and seconded by Trustee Kouba to rebalance to achieve a 55%equity and 45%fixed income allocation and provide additional funding for GTAA, withdraw$230,000 from Vanguard REIT Index Fund, and$100,000 each from the three large cap equity managers— BlackRock,Mainstay,and Yactman,and withdraw$300,000 from Harbor International. Transfer$430,000 to BlackRock GTAA and$400,000 to MB Financial Bank. AYES: Trustees Erickson,Fagan,Fleishman, Schlindwein and Kouba NAYS: None ABSENT: None Mr. Russell will follow up with Treasurer Sharon Dangles to execute the transactions as discussed. Mr. Russell distributed and discussed an Investment Manager Review for Small Cap Value Equity Style with the Board. Mr. Russell reported that combined with a recent change of management, underperformance, and a Morningstar down grade, Investment Performance Services,LLC is recommending that the Board consider terminating the Perkins Small Cap Value Fund. The Board discussed the selection of managers and Mr. Russell answered the Board's questions. A motion was made by Trustee Schlindwein and seconded by Trustee Kouba to terminate the Perkins Small Cap Value Fund and invest the proceeds in American Beacon Small Cap Value. AYES: Trustees Erickson,Fagan,Fleishman, Schlindwein and Kouba NAYS: None ABSENT: None The MB representatives distributed and reviewed the fixed income, cash and equivalent quarterly investment report with the Board. The Board discussed the investment policy and Corporate Bonds. A motion was made by Trustee Kouba and seconded by Trustee Fagan to amend the investment policy statement, based on the recommendation from Mr. Russell,to allow a 50%maximum allocation for Corporate Bonds. AYES: Trustees Erickson, Fagan,Fleishman, Schlindwein and Kouba NAYS: None ABSENT: None 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. Mr. Russell,Mr. Thompson and Ms. Powers were excused and left the meeting at 11:10 a.m., and the Board took a break. The Board reconvened at 11:18 a.m. INFORMATIONAL ITEMS AND UNFINISHED BUSINESS The Board reviewed the Trustee Training Summary and was reminded to complete any unfinished training requirements prior to the end of the calendar year. Oak Brook Firefighters'Pension Fund Minutes of Meeting—October 24,2013 Page 3 of 4 Trustee Kouba submitted receipts for reimbursement of his training expenses while attending the IPPFA Midwest training conference. A motion was made by Trustee Fleishman and seconded by Trustee Schlindwein to approve the reimbursement of Trustee Kouba's hotel and mileage expenses in the amount of$394.87. AYES: Trustees Erickson, Fagan,Fleishman, Schlindwein and Kouba NAYS: None ABSENT: None Ms. Davis reported that as of today, only one affidavit remains outstanding. Ms. Davis has been in communication with Mr. Read Rogers who has not been able to complete his annual affidavit due to health challenges. However, Mr. Rogers stated that he will complete and return the affidavit very soon. Post Meeting Note: Ms. Davis received Mr. Rogers'completed affidavit on 1012512013; 100%compliance. The original affidavits will be filed into the members'pension files after the next meeting. The Board discussed the recent Freedom of Information Act(FOIA)requests that were received and completed. The Legal and Legislative Update was presented in the board meeting packet for the Board to review at their convenience. The Board noted that Mark Schoppe's disability application is in process, and a petition to intervene has been filed by Glenside Fire. The Board can grant Glenside Fire permission to intervene or,the Board can limit Glenside Fire's participation as an observer only. A motion was made by Trustee Fagan and seconded by Trustee Fleishman to seek advice from the Board Attorney. AYES: Trustees Erickson,Fagan,Fleishman, Schlindwein and Kouba NAYS: None ABSENT: None The Board discussed the status of pending pension applications. No further action taken. The Board noted that in the prior meeting minutes Zack Busse was discussed as a recent new hire,and that his date of hire was incorrectly stated as 07/08/2013. A motion was made by Trustee Kouba and seconded by Trustee Schlindwein to accept Zack Busse into the Fund;his date of hire is 07/01/2013, with Tier 2 status. Motion carried by unanimous voice vote. NEW BUSINESS The Board discussed the recent new hire,Ken Heinzelman, and that his request for reciprocity with Peoria Fire is currently in process. A motion was made by Trustee Kouba and seconded by Trustee Schlindwein to accept Ken Heinzelman into the Fund, his date of hire is 10/07/2013, with Tier 2 status. Motion carried by unanimous voice vote. Further discussion about the progress of his reciprocity will be addressed at the next meeting. The Board discussed the reciprocity request received from Lt. Brian Bitterlin,which is currently in process. Further discussion about the progress of his reciprocity will be addressed at the next meeting. The Board discussed the non-duty disability application which was received from FF/PM George Grodek, and is currently in process. Further update on his disability application will be addressed at the next meeting. The Board noted that it does not currently have administrative rules other that the Illinois Pension Code and the Article 4 statutes. The Board agreed that there is no need for the review and update of any contractual agreements with custodians and advisors at this time. Oak Brook Firefighters'Pension Fund Minutes of Meeting—October 24,2013 Page 4 of Trustee Fagan was excused and left the meeting at 12:22 p.m.to attend training. The Board confirmed the engagement of following professional service contracts: IDOI Annual Statement—L&A is contracted to complete this service through 2015;Actuarial services will be completed by Foster&Foster; and the annual Audit will be completed by the Village. Alderman Adler left the meeting at 12:31 p.m. The Board discussed establishing the 2014 regular meeting dates. A motion was made by Trustee Kouba and seconded by Trustee Schlindwein to approve the following 2014 dates: January 31St,April 25`h,July 30`''and October 31". All meetings will be held at 9:00 a.m. and at the same location. The next Board meeting is scheduled for January 31, 2014 at 9:00 a.m. CLOSED SESSION—The Board agreed there was no need to hold a closed session. ADJOURNMENT A motion was made by Trustee Kouba and seconded by Trustee Schlindwein to adjourn the meeting at 12:37 p.m. Motion carried by unanimous voice vote. Respectfully submitted, Michael Erickson,President John Fagan, Secretary Minutes prepared by Pension Services Administrator, Becky Davis All Checkbooks Oak Brook Firefighters' Pension Fund OAKBRKFIRE 07/01/13-09/30/13 Vendor Checks Report Page 1 10/09/13 10:33 AM Vendor Name Chk.No. Check Date Amount LAUTERBACH&AMEN,LLP 20098 07/15/13 1,320.00 REIMER&KARLSON LLC 20099 07/15/13 195.70 Subtotal 1,515.70 OAK BROOK BANK/IRS-EFTPS 11868 07/31/13 16,266.40 VILLAGE OF OAK BROOK 4006 07/31/13 11,700.72 Subtotal 27,967.12 COALITION FOR QUALIFIED PLAN STATI. 20100 08/16/13 300.00 REIMER&KARLSON LLC 20101 08/16/13 935.71 Subtotal 1,235.71 OAK BROOK BANK/IRS-EFTPS 11904 08/30/13 16,266.40 VILLAGE OF OAK BROOK 4011 08/30/13 10,090.52 Subtotal 26,356.92 REIMER&KARLSON LLC 20103 09/13/13 622.56 IPPFA 20104 09/16/13 775.00 LAUTERBACH&AMEN,LLP 20102 09/16/13 3,740.00 Subtotal 4,515.00 MB FINANCIAL BANK 50051 09/30/13 1,230.12 MB FINANCIAL BANK 50050 09/30/13 5,883.13 OAK BROOK BANK/IRS-EFTPS 11940 09/30/13 16,266.40 VILLAGE OF OAK BROOK 4016 09/30/13 9,977.61 Subtotal 33,357.26 TOTAL 95,570.27 Oak Brook Fire Pension Fund Board meeting packet for October 24,2013 9 of 17