Minutes - 10/22/2020 - Police Pension Fund BoardBOARD OF TRUSTEES OF THE POLICE PENSION FUND
Minutes Page 1 of 6 October 22, 2020
VILLAGE OF OAK BROOK
BOARD OF TRUSTEES OF THE POLICE PENSION FUND - Minutes
October 22, 2020
UNOFFICIAL UNTIL APPROVED AS WRITTEN
OR AS AMENDED BY BOARD OF TRUSTEES OF THE
POLICE PENSION FUND ON January 20, 2021
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 Vel Torlo at 6:21 p.m. in the Upper Level Conference Room of the Samuel E. Dean
Board Room of the Butler Government Center, 1200 Oak Brook Road, Oak Brook, Illinois , AND also
through Zoom.
2.ROLL CALL
The roll was called with the following persons
PRESENT: President Vel Torlo (in-person), Vice President Alan Feldman (in-person), Secretary Ed
Caspers (Zoom), Trustee Hitesh Patel, (in-person) Trustee Reid Foltyniewicz (Zoom)
ABSENT: None
IN ATTENDANCE: Phil Kosmala (in-person) of Taiber Kosmala and Associates, Bob Thompson
(Zoom) and Bruce Heniken (Zoom) of Fifth Third Bank, Village Finance Director/Treasurer Jason
Paprocki (Zoom), Pension Clerk Rose Kane (in-person)
3.PUBLIC COMMENTS None presented.
4.APPROVAL OF MINUTES
a.Approval of Regular Meeting Minutes of July 21, 2020
Motion by Secretary Caspers, seconded by Vice President Feldman, to approve the Meeting
Minutes of the July 21, 2020 Regular Board Meeting as presented.
VOICE VOTE: Motion carried.
5.CONSENT AGENDA
All items on the Consent Agenda are considered to be routine in nature and will be enacted in one
motion.
a.Approval of July 1-31, 2020 expenditures in the total amount of $273,779.06
b.Approval of August 1-31, 2020 expenditures in the total amount of $269,578.15
c.Approval of September 1-30, 2020 expenditures in the total amount of $256,063.15
d.Approval of Taiber Kosmala & Associates LLC’s invoice dated 8/5/2020 in the amount of
$7,000.00
e.Approval of Lauterbach & Amen LLP’s invoices for: 12/2019, 5/2020 and 7/2020 Accounting
Services and FYE19 IDOI Report, in the total amount of $4,840.00
Motion by Trustee Patel, seconded by Secretary Caspers, to approve the Consent Agenda.
ROLL CALL:
Ayes: 5 – Vice President Feldman, Secretary Caspers, Trustee Patel, Trustee
Foltyniewicz, President Torlo
Nays: 0 – None
Absent: 0 – None
Motion carried.
6.ITEMS REMOVED FROM CONSENT AGENDA – None presented.
ITEM #4.a.
BOARD OF TRUSTEES OF THE POLICE PENSION FUND
Minutes Page 2 of 6 October 22, 2020
7.NEW BUSINESS
a.Taiber Kosmala and Associates, LLC Report on Third Quarter, 2020
Mr. Kosmala referred to Page 6 of Taiber Kosmala and Associates report and stated that it was a
solid quarter for the portfolio, up 5.25%. He discussed the liquidity that has been injected into the
bond markets and has helped keep the economy afloat, for both consumers and corporations alike.
He stated that the Fund now has a 10% overweight to U.S. Large Cap Equities because of capital
appreciation and discussed the performance of six or seven stocks and the bounce back of the
portfolio. Mr. Kosmala stated that they are not as worried about a runaway in rat es. He said that they
are looking at a market environment of $9.5 trillion dollars injected into the system. He said the U.S.
will have fully re-couped the second quarter’s malaise by the next quarter. He stated that there are
two risks and that is the election and a Democratic sweep, but the one risk if there is a contested
election, would mean that the $1.8 trillion of stimulus might get bought down until after the
inauguration.
Mr. Kosmala recommended locking in a $1 million worth of gains of the equity portfolio from Large
Caps, and stated that the Fund is disproportionately skewed to Large Cap Growth at this time. He
recommended the following to get the Fund back in balance:
•taking $500,00 from MFS Growth
•taking $250,000 from Lazard U.S. Equity
•taking $250,000 from Vanguard 500 Index
He stated that with the virus, the election and the stimulus there will result in massive amounts of
liquidity jammed into the system with 0% interest rates. He added that the $1 million dollars detailed
above could be put into fixed income because it is still hedging the exposure.
Discussion regarding what fees will be incurred with the consolidation of the police and f ire funds.
Oak Brook Pension Performance
On page 6 of the Taiber Kosmala report, the portfolio activity was listed as follows:
b.Fifth Third Financial Investment Management Performance Report on Third Quarter, 2020
Bob Thompson introduced Bruce Heniken who will be taking over his position and Patrick Swaney
who will be managing the portfolio. He discussed the bond performance and how it was affected by
the lower interest rates, specifically, the Treasuries at 8.90%, Municipals returned a little over 3%. He
stated that as of 9/30/2020, the fixed income portfolio is valued at $11,835,961.26.
Page 4 of the Fifth Third report:
EQUITY MARKET OVERVIEW
Index 1-Month 3-Months YTD 1-Year 3-Years*5-Years*
MSCI ACWI (Net) -3.23 8.13 1.37 10.44 7.11 10.29
S&P 500 -3.80 8.93 5.57 15.14 12.26 14.12
S&P 400 Mid-Cap -3.25 4.77 -8.62 -2.17 2.88 8.09
Russell 2500 -2.59 5.88 -5.82 2,20 4.43 8.94
Summary of Cash Flows
Beginning Market Value $38,984,484
Net Cash Flow -$ 149,964
Net Investment Change $ 2,059,275
Ending Market Value on 3/31/18 $40,893,795
BOARD OF TRUSTEES OF THE POLICE PENSION FUND
Minutes Page 3 of 6 October 22, 2020
MSCI EAFE (Net) -2.60 4.80 -7.09 0.49 0.62 5.26
MSCI Emerging Mkt (Net) -1.60 9.56 -1.16 10.54 2.42 8.96
Page 5 of the Fifth Third report:
FIXED INCOME MARKET OVERVIEW
Index 1-Month 3-Months YTD 1-Year 3-Years*5-Years*
BC U.S Intm Gov/Credit -0.01 0.62 5.92 6.32 4.43 3.39
BC Global Agg excl. USD -0.58 4.14 4.77 5.48 3.07 3.59
BC U.S. TIPS -0.37 3.03 9.22 10.08 5.79 4.61
BC U.S. Municipal Bonds 0.02 1.23 3.33 4.09 4.27 3.84
BC U.S. High Yield Bonds -1.03 4.60 0.62 3.25 4.20 6.79
Page 6 of the Fifth Third report:
REAL ESTATE AND ALTERNATIVE INVESTMENTS OVERVIEW
Index 1-Month 3-Months YTD 1-Year 3-Years*5-Years*
S&P US REIT -3.21 1.55 -17.07 -17.73 0.21 3.75
HFRX Global Hedge Fund -0.17 2.74 1.62 4.23 1.48 2.14
S&P Global Infrastructure -2.99 1.59 -18.10 -13.91 -1.42 4.43
S&P GSCI Gold Total Return -4,20 5.28 24.45 28.69 13.83 11.18
Thompson Reuters/Core
Community
-3.06 7.67 -19.77 -13.96 -5.24 -4.08
Page 8 of the Fifth Third report:
ALLOCATION SUMMARY: ASSET CATEGORY
%
HOLDINGS MARKET VALUE
ESTIMATED
ANNUAL
INCOME
CURRENT
YIELD
Marketable Holdings
Traditional Asset
Classes 100.00% $11,835,961.26 $397,104.87 3.36%
Cash and Equivalents 8.26% $ 977,081.58 $ 97.71 0.01%
Fixed Income 91.74% $10,858.879.68 $397,007.16 3.66%
Total Marketable
Holdings 100.00% $11,835,961.26 $397,104.87 3.36%
Total Holdings $11,835,961.26 $397,104.87 3.36%
Mr. Thompson then discussed the Reconciliation Summary on page 9 of the Fifth Third report,
covering the period from 7/1/2020 through 9/30/20.
RECONCILLIATION SUMMARY
Total Holdings on 07/01/2020 $12,035,423.79
Beginning Marketable Holdings on 07/01/2020 $11,942,090.21
Beginning Accrued Income $93,333.58
Beginning Value $12,035.423.79
Contributions
Cash Contributions $654,462.76
BOARD OF TRUSTEES OF THE POLICE PENSION FUND
Minutes Page 4 of 6 October 22, 2020
Asset Receipts $0.00
Other Contributions $0.00
Total Contributions $654,462.76
Withdrawals
Cash Withdrawals ($797,689.45)
Asset Delivery $0.00
Fees ($5,261.37)
Total Withdrawals ($802,950.82)
Income Earned
Interest Collected $82,214.60
Dividends Collected $0.00
Other Income $0.00
Net Accrued Income ($17,776.74)
Total Income Earned $99,991.34
Net Change ($39,855.49)
Ending Marketable Holdings on 03/31/2020 $11,835,961.26
Ending Accrued Income $111,110.32
Ending Value $11,947,071.58
Total Holdings on 09/30/2020 $11,947,071.58
Total Earnings $60,135.85
Mr. Thompson then talked about page 10 of the Fifth Third report regarding the Performance
Summary: Asset Category. He stated that the Treasuries ran up very quickly.
FIXED INCOME: INDIVIDUAL HOLDINGS
Category
% Total
Fixed
Income
Market Value
Estimated
Annual
Income
Current
Yield
Domestic Fixed Income
Government Bonds 42.54% $4,618,947.90 $199,227.00 4.31%
Domestic Fixed Income
Corporate Bonds 42.50% $4,614,848.85 $147,835.31 3.20%
Intl Developed Mkt Bonds 14.04% $1,524,313.75 $47,943.00 3.15%
Domestic Fixed Income
Mortgage Backed 0.00% $112.98 $8.44 7.47%
Domestic Fixed Income
Savings Instruments 0.00% $0.00 N.A N.A
Total Indiv Fixed Income
Holdings
Total Pooled Fixed
Income Holdings
99.07%
0.93%
$10,758,223.48
$100,656.20
$395,013.75
$1,993.41
3.67%
1.98%
Total Fixed Income
Holdings
100.00% $10,858,879.68 $397,007.16 3.66%
Next, Mr. Thompson discussed page 11 of the Fifth Third Report in detail. He said that the bond
performance has captured a pretty decent yield with the municipal and corporate bonds and is a pretty
good position to be in right now with fixed income. He added that whenever you look at fixed income
you have to worry about credit quality, but the Fund’s credit quality is at an AA rating for Moody’s and
an A+ rating for S&P. Mr. Thompson remarked that per the Illinois Pension Code, the Fund needs to
maintain an investment grade bond rating; at least a BBB rating.
BOARD OF TRUSTEES OF THE POLICE PENSION FUND
Minutes Page 5 of 6 October 22, 2020
Mr. Heniken discussed getting the Fund to the Illinois Superfund.
c.Approval of Investment Transactions for Third Quarter, 2020
Motion by Trustee Patel, seconded by Vice President Feldman, to approve the Investment
Transactions for Third Quarter, 2020.
ROLL CALL:
Ayes: 5 –Secretary Caspers, Trustee Patel, Trustee Foltyniewicz, President Torlo, Vice
President Feldman
Nays: 0 – None
Absent: 0 – None
Motion carried.
In regard to the previous recommendation made by Taiber Kosmala & Associates, it was clarified by
Mr. Kosmala that the companies relating to this recommendation are social media companies.
The following motion was made:
Motion by Trustee Patel, seconded by Vice President Feldman, to follow the recommendation
made by Taiber Kosmala to sell $500,000 of MFS Growth, $250,000 worth of Lazard U.S. Equity
Concentrated Fund and $250,000 from Vanguard 500 Index, for a total of $1 million, AND invest
$1 million back in the Fifth Third Fixed Income portfolio.
ROLL CALL:
Ayes: 5 – President Torlo, Vice President Feldman, Secretary Caspers, Trustee Patel,
Trustee Foltyniewicz
Nays: 0 – None
Absent: 0 – None
Motion carried.
d.Approval of Application for Membership in the Oak Brook Police Pension Fund of Jonathan
Szablewski (hired 8/7/2020)
e.Approval of Application for Membership in the Oak Brook Police Pension Fund of John Day (hired
9/23/2020)
f.Approval of Application for Membership in the Oak Brook Police Pension Fund of Isaiah Reyes
(hired 9/30/2020)
Motion by Trustee Foltyniewicz, seconded by Secretary Caspers, to approve the Application s
for Membership in the Oak Brook Police Pension Fund of Jonathan Szablewski, John Day and
Isaiah Reyes.
ROLL CALL:
Ayes: 5 – Trustee Patel, Trustee Foltyniewicz, President Torlo, Vice President Feldman,
Secretary Caspers
Nays: 0 – None
Absent: 0 – None
Motion carried.
g.Approval of Transfer of Creditable Service for Justin Pearce from the Ha nover Park Police
Pension Fund to the Oak Brook Police Pension Fund
BOARD OF TRUSTEES OF THE POLICE PENSION FUND
Minutes Page 6 of 6 October 22, 2020
Motion by Secretary Caspers, seconded by Trustee Patel, to approve the transfer of creditable
service for Justin Pearce from the Hanover Park Police Pension Fund to the Oak Brook Police
Pension Fund. VOICE VOTE: Motion carried.
8.PENDING BUSINESS
a.Discussion/action regarding disability matter
No update given.
9.INFORMATION & UPDATES
a.Scheduling of first quarterly meeting in January 2021
Consensus to meet for the first quarterly meeting on January 20, 2021 at 6:15 p.m.
President Torlo and the Board thanked Bob Thompson for his service to the Pension Fund and wished
him well.
Brief discussion regarding the anticipated retirement of Pension Clerk Kane and how the Clerk position
for the Board will be filled. Finance Director/Treasurer Paprocki agreed to provide the cost of
Lauterbach and Amen’s fees for serving as Clerk to the Firefighters Pension Fund Board.
10.ADJOURNMENT
Motion by Secretary Caspers, seconded by Trustee Patel, to adjourn the Board of Trustees of
the Police Pension Fund meeting at 7:15 p.m. VOICE VOTE: Motion carried.
ATTEST:
Edward J. Caspers, Secretary
Board of Trustees of the Police Pension Fund
Edward J. Caspers /s/