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HomeMy WebLinkAboutMinutes - 10/31/2014 - Firefighter's Pension Fund BoardMINUTES OF A REGULAR MEETING OF THE BOARD OF TRUSTEES OAK BROOK FIREFIGHTERS’ PENSION FUND October 31, 2014 A regular meeting of the Board of Trustees of the Oak Brook Firefighters’ Pension Fund was held on Friday, October 31, 2014 at 8:00 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 President Michael Erickson called the meeting to order at 8:07 a.m. ROLL CALL Upon roll call the following answered: Present: President Michael Erickson, Secretary John Fagan, Trustee Mark Fleishman, Trustee Timothy Schlindwein and Trustee George Kouba Absent: None Also Present: David Russell of Investment Performance Services, LLC (IPS); Becky Davis of Lauterbach & Amen, LLP (L&A); Amber Powers and Robert Thompson of MB Financial; Treasurer Sharon Dangles; Lt. Mark Schoppe; Don Adler, Village Trustee; Cathy Doczekalski, Asst. Acting Village Manager; the Village Attorney’s office represented by Mark E. Burkland TRUSTEES’ CONTINUING EDUCATION SESSION – 8:00 a.m. to 9:00 a.m. Mr. Russell conducted a review of Best Practices in Manager Due Diligence and Evaluation. This was a one hour session to provide the Trustees with continuing education credit. 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 Fagan and seconded by Trustee Schlindwein to approve the following minutes: the 07/25/2014 special meeting minutes and the 07/30/2014 regular meeting minutes, as written; and the 09/02/2014 special meeting minutes for both the Schoppe and White disability hearings, as amended. Motion carried by unanimous voice vote. The Board reviewed the closed session minutes from the 09/02/2014 Schoppe disability hearing and the White disability hearing. A motion was made by Trustee Schlindwein and seconded by Trustee Fleishman to approve the 09/02/2014 closed session meeting minutes, as written. Motion carried by unanimous voice vote. INVESTMENT PERFORMANCE SERVICES Mr. Russell distributed the quarterly investment report and reviewed it with the Board. Mr. Russell discussed the market performance for the quarter and identified the sectors that were down and indicated the contributing factors. Mr. Russell stated that currently there are no manager issues, all managers are four or five star quality, and all are in compliance; volatility is expected going into 2015 and there are no changes recommended at this time. As of 09/30/2014, the total fund performance was -1.8% for the quarter, and 2.5% year-to-date. The ending market value was $24,221,554. The benchmark performance was -1.1% for the quarter, and 4.2% year-to-date. The investment earnings were -$462,422 for the quarter. The asset allocations were: Domestic Equity 22.8%, International Equity 14.7%, Fixed Income 42.9%, REIT Mutual Funds 10.8%, Global Tactical Asset Allocation 8.4%, and total Cash 0.4%. The portfolio performance reported a 5.5% return for one year, and 8.6% for three years. Since inception (January 2010), the portfolio return is 7.0%. At 9:46 a.m. the meeting was interrupted by Mr. Adler to discuss the Village actuarial reports; Mr. Adler left the meeting at 10:00 a.m. Oak Brook Firefighters’ Pension Fund Minutes of Meeting – October 31, 2014 Page 2 of 4 Mr. Russell answered the Board’s questions and indicated that he will provide some options regarding indexing assets at the next meeting. Mr. Thompson and Ms. Powers distributed and reviewed the MB Financial quarterly report and discussed the economic overview. As of 09/30/2014, the effective duration of the fixed income portfolio was 2.67 years. The Board discussed the importance of positive cash flow, possible research into specific governmental or municipal bonds, and possible re-evaluation of the effective duration given the current market. A motion was made by Trustee Fagan and seconded by Trustee Schlindwein to accept the investment report as presented. Motion carried by unanimous voice vote. At 10:46 a.m. the following were excused and left the meeting: Mr. Russell, Mr. Thompson and Ms. Powers. The Board took a break at 10:46 a.m. and reconvened at 10:55 a.m. Present: President Michael Erickson, Secretary John Fagan, Trustee Mark Fleishman, Trustee Timothy Schlindwein and Trustee George Kouba Absent: None Also Present: Becky Davis of Lauterbach & Amen, LLP (L&A); Amber Powers and Robert Thompson of MB Financial; Treasurer Sharon Dangles; Lt. Mark Schoppe TREASURER’S REPORT Ms. Dangles discussed the 12/31/2014 actuarial report and expanded on Mr. Adler’s earlier comments. At 11:33 a.m. Ms. Doczekalski and Mr. Burkland joined the meeting. A motion was made by Trustee Schlindwein and seconded by Trustee Kouba to release Foster & Foster from working solely with the Fire Pension Fund, subject to the Village agreeing to an annual meeting with the Pension Fund to discuss the actuarial assumptions that will be used in the report. After further discussion there was a roll call vote: AYES: Trustee Schlindwein NAYS: Trustees Fleishman, Erickson, Kouba and Fagan ABSENT: None MOTION FAILED A motion was made by Trustee Erickson and seconded by Trustee Kouba to hold annual meetings with the Village to discuss the actuarial assumptions. AYES: Trustee Schlindwein, Fleishman, Kouba, Fagan and Erickson NAYS: None ABSENT: None MOTION CARRIED A motion was made by Trustee Schlindwein and seconded by Trustee Kouba to release Foster & Foster from working exclusively with the Fire Pension Fund. AYES: Trustees Schlindwein and Kouba NAYS: Trustees Fleishman, Erickson and Fagan ABSENT: None MOTION FAILED ACCOUNTANT’S REPORT The Board reviewed the Municipal Compliance Report (MCR) presented in the Board meeting packet. A motion was made by Trustee Kouba and seconded by Trustee Schlindwein to authorize the President and Secretary to sign the MCR. Motion carried by unanimous voice vote. Oak Brook Firefighters’ Pension Fund Minutes of Meeting – October 31, 2014 Page 3 of 4 The Board will submit the MCR to the Village. The Board reviewed the financial report summary presented in the Board meeting packet. For the nine months ended 09/30/2014, the net position held in trust for pension benefits was $24,325,238.94. A motion was made by Trustee Kouba and seconded by Trustee Fagan to accept the 09/30/2014 financial report as prepared by L&A. Motion carried by unanimous voice vote. The Board reviewed the Warrant List of Disbursements presented in the Board meeting packet. A motion was made by Trustee Kouba and seconded by Trustee Schlindwein to approve the net payroll payouts and vendor payouts for July, August and September 2014. The vendor payouts totaled $143,307.83 (see attached detail). AYES: Trustees Erickson, Fagan, Schlindwein, Fleishman and Kouba NAYS: None ABSENT: None INFORMATIONAL ITEMS AND UNFINISHED BUSINESS • Trustee Training Summary: the Board reviewed the certificates received and recorded in the summary and discussed the calendar year training schedule. o A motion was made by Trustee Erickson to change the training schedule to August 12, 2014 through August 13, 2015. Motion failed due to the lack of a second. o A motion was made by Trustee Fagan and seconded by Trustee Kouba to allow excess continuing education hours to roll over into the next calendar year. Motion carried by unanimous voice vote. • Annual Affidavits of continued eligibility: 100% compliance; all annual affidavits were received and submitted to the Fund for its recordkeeping. • Annual Active Member Statements(AMS) – the Fund distributed the AMS to the active members for their review. • Update on DOI compliance audit, response to Summary of Findings: the Board indicated that the final report from the DOI has not been received. Follow up on this topic will be discussed at the next meeting. NEW BUSINESS The Board reviewed the new non-duty disability pension benefit calculation for George Grodek and retroactive payment due to the recently finalized labor contract. • A motion was made by Trustee Fagan and seconded by Trustee Schlindwein to approve the new pension benefit calculation and retroactive payment for George Grodek, as follows: date of entry was 02/27/1994, date of disability was 08/31/2013, effective date of pension was 09/01/2013; at the age of 50 years, and with 19 years and 6 months of creditable service earned; at 50% of his applicable salary of $83,158.90, the amount of his originally granted monthly pension is $3,464.95, until his first increase in January of 2024. Mr. Grodek will receive a retroactive payment of $1,121.40 (September 2013 – August 2014). AYES: Trustees Erickson, Fagan, Schlindwein, Fleishman and Kouba NAYS: None ABSENT: None The Board discussed the Decision and Order on the disability application of Lt. Mark Schoppe. The transcripts from the hearing were just completed and the Decision and Order has not been received. At 12:09 p.m. Mr. Burkland left the meeting. A special meeting will need to be held at a later date. Mr. Schoppe stated that he is looking into the possibly of converting his non-duty disability pension into a retirement pension. Further discussion regarding Mr. Schoppe’s pension benefits and the adoption of Decision and Order will be discussed at the next meeting. Oak Brook Firefighters’ Pension Fund Minutes of Meeting – October 31, 2014 Page 4 of 4 The Board reviewed the line of duty disability pension benefit calculation for FF Jennifer White and her retroactive payment. • A motion was made by Trustee Schlindwein and seconded by Trustee Fagan to approve the duty disability pension benefit calculations and retroactive payment for FF Jennifer White, as follows: date of entry was 10/11/2004, date of disability was 01/18/2014, effective date of pension was 01/19/204; at the age of 39 years, and with 9 years and 3 months of creditable service earned; at 65% of her applicable salary of $85,134.00, the amount of her originally granted monthly pension is $4,611.43, until her first increase in January of 2035. Ms. White will receive a dependent benefit of $20.00 per month until her daughter reaches the age of 18 on 08/25/2021, and a retroactive payment of $11,079.85 (January 19–31, 2014 – September 2014). AYES: Trustees Erickson, Fagan, Schlindwein, Fleishman and Kouba NAYS: None ABSENT: None The Board discussed the Decision and Order on the disability application of FF Jennifer White. The transcripts from the hearing have not been completed and the Decision and Order has not been completed. A special meeting will need to be scheduled at a later date to adopt and publish the Decision and Order. The Board agreed to table the acceptance of new hires, Gino Picciola and Connor Doran, until the next meeting. The Board discussed the resignation of FF Ken Heinzelman. FF Heinzelman’s date of hire was 10/07/2013 and his date of resignation was 08/15/2014. L&A attempted to contact FF Heinzelman to inform him of his options regarding his contributions in the Fund, but there has been no reply. The Board noted that there was no need to update the Board Rules and forms at this time. The Board agreed that there was no need to update contractual agreements with custodians or advisors at this time. The Board discussed the completion of specific services. A motion was made by Trustee Erickson and seconded by Trustee Fleishman to approve the completion of the following services for the FYE 12/31/2014, as follows: IDOI Annual Statement – L&A, Audit – the Village of Oak Brook, Actuary – Foster & Foster. Motion carried by unanimous voice vote. Ms. Doczekalski left the meeting at 12:20 p.m. The Board discussed the establishment of the 2015 meeting dates. A motion was made by Trustee Kouba and seconded by Trustee Fleishman to approve the following 2015 meeting dates: January 29th, April 29th, July 29th, and October 29th; all meetings will be held at 9:00 a.m. at the same location. Motion carried by unanimous voice vote. The next regular meeting is scheduled for January 29, 2015 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 Fleishman to adjourn the meeting at 12:27 p.m. Motion carried by unanimous voice vote. Respectfully submitted, Michael Erickson, President John Fagan, Secretary Minutes prepared by Pension Services Administrator, Becky Davis