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Home My WebLink AboutMinutes - 04/28/2017 - Police Pension Fund BoardVILLAGE OF OAK BROOK BOARD OF TRUSTEES OF THE POLICE PENSION FUND - Minutes April 28, 2017 UNOFFICIAL UNTIL APPROVED AS WRITTEN √ OR AS AMENDED BY BOARD OF TRUSTEES OF THE POLICE PENSION FUND ON July 17, 2017 1. CALL TO ORDER: The Regular Meeting of April 28, 2017 of the Board of Trustees of the Oak Brook Police Pension Fund was called to order by President Torlo at 10:30 a.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. 2. ROLL CALL: The roll was called with the following persons PRESENT: President Vel Torlo, Vice President Alan Feldman, Secretary Edward Caspers, Trustee Hitesh Patel, Trustee Benjamin Kadolph ABSENT: None IN ATTENDANCE: Bob Thompson, Spencer Klein, Melissa Nevills, and Frank Fanelli from MB Financial; Phil Kosmala from Taiber Kosmala & Associates, LLC; Todd Schroeder from Lauterbach & Amen; Finance Director/Treasurer Jason Paprocki; Pension Clerk Rose Kane 3. PRESIDENT'S COMMENTS: - None presented. 4. APPROVAL OF MINUTES: a. Approval of Regular Meeting Minutes of January 31, 2017 Motion by Vice President Feldman, seconded by Secretary Caspers, to approve the Minutes of the January 31, 2017 Regular Board Meeting as written. 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 January 1-31, 2017 expenditures in the total amount of $ 190,812.79 b. Approval of February 1-28, 2017 expenditures in the total amount of $ 197,812.79 c. Approval of March 1-31, 2017 expenditures in the total amount of $ 228,251.79 d. Approval of Taiber Kosmala & Associates, LLC’s invoice in the total amount of $7,000.00, dated January 23, 2017 e. Approval of Lauterbach & Amen, LLP’s invoices in the total amount of $2,170.00, for services rendered January and March, 2017 f. Approval of The Mitchell Group’s invoice dated January 7, 2017, for Fourth Quarter fees in the amount of $2,582.19 g. Approval of Illinois Professional Firefighters Association May 5, 2017 pension seminar expenditure in the amount of $350.00 for two Trustees Motion by Secretary Caspers, seconded by Vice President Feldman, to approve the Consent Agenda. ROLL CALL: Ayes: 5 -- Vice President Feldman, Secretary Caspers, Trustee Patel, Trustee Kadolph, President Torlo Nays: 0 – None Absent: 0 – Motion carried. 6. ITEMS REMOVED FROM CONSENT AGENDA – None presented. BOARD OF TRUSTEES OF THE POLICE PENSION FUND Minutes Page 1 of 3 April 28, 2017 7. UNFINISHED BUSINESS: a. Discussion/Action regarding Actuarial Assumptions Todd Schroeder of Lauterbach & Amen provided a handout regarding an Actuarial Valuation Summary (December 31, 2016), showing a comparison between 6.75% and 6.50% investment rates, with contribution recommendations of $1,542,471 and $1,684,567, respectively. Comments were made regarding the market and investment rates. Phil Kosmala referred to Tab 3 of their Market Mosaic on the page entitled Historical Context, showing 10 year returns, and Spencer Klein discussed the anticipated bond performance. Bob Thompson remarked on the projections required by GASB for public funds. Vice President Feldman inquired about the rates and Mr. Schroeder stated that the State of Illinois would use 6.75% and Finance Director/Treasurer Paprocki affirmed that the Village would also use 6.75%. Vice President Feldman suggested going a step ahead and utilizing the 6.5% investment rate. Opinions were expressed and questions were addressed by Mr. Schroeder. Vice President Feldman inquired about the mortality table being used for these assumptions, and Mr. Schroeder affirmed that he kept theirs pretty much the same and talked about the historical perspective. He stated that the Society of Actuaries will be updating the mortality tables on an annual basis, and suggested utilizing the MP2016 table for the additional Social Security data. He stated that the Village’s actuary is using the 2000 mortality table. Motion by Secretary Caspers, seconded by Trustee Kadolph, to approve the 2017 Actuarial Assumptions utilizing the 6.5% investment rate. ROLL CALL: Ayes: 5-- Secretary Caspers, Trustee Patel, Trustee Kadolph, President Torlo, Vice President Feldman Nays: 0 – None Absent: 0 – Motion carried. Mr. Schroeder stated that he would provide a new report reflecting the 6.5% investment rate. 8. NEW BUSINESS: a. Taiber Kosmala & Associates, LLC Report on First Quarter, 2017 Prior to reviewing the quarterly report, Phil Kosmala discussed capital market trends during the quarter and the firm’s outlook for the balance of the year. Market review Mr. Kosmala discussed that despite tepid economic data in the United States and overseas, business optimism continues to surge in early 2017. He stated that this optimism translated into strong gains across global equity markets and the S&P 500 Index marched forward, turning out a 6.07% gain for the quarter. He discussed the “black swan” concept and “soft” data. Performance On page 6 of the Taiber, Kosmala Report the portfolio activity was listed as follows: Portfolio Activity Market Value on 12/31/2016 33,213,087 Net Cash Flow -183,521 Net Increase/Decrease 1,208,961 Market Value on 03/31/2017 34,238,527 Mr. Kosmala referred to page 7 of his report and stated that the Pension Fund gained 3.72% for the quarter, outperforming the benchmark (+3.19%). He added that for the past year the Pension Fund gained 9.33%, outperforming the benchmark by 0.45%, and stated that the primary reason for outperformance in the quarter was an overweight position to equities and commensurate underweight in fixed income relative to the benchmark. He stated that strong performance by the managers and an overweight to international BOARD OF TRUSTEES OF THE POLICE PENSION FUND Minutes Page 2 of 3 April 28, 2017 equities also contributed to the quarter’s outperformance. Mr. Kosmala stated that they were not recommending any changes in asset allocation decisions at this time, but would keep the Board informed. Spencer Klein discussed MB’s spin on the market activity and the rally/recovery. He stated that this is a very interesting time and not the time to be overly aggressive. b. MB Financial Investment Management Performance Report on First Quarter, 2017 Per page 15 of MB’s report: • Market Value of the Total Fund: $11,129,896 • Fixed Income: $11,141,574 • Cash and Equivalents: -$11,674 Mr. Klein referred to page 17 of Mb’s report regarding the fixed income asset composition. c. Approval of Investment Transactions for First Quarter, 2017 Motion by Trustee Kadolph, seconded by Secretary Caspers, to approve the Investment Transactions for the First Quarter, 2017. ROLL CALL: Ayes: 5-- Trustee Patel, Trustee Kadolph, President Torlo, Vice President Feldman, Secretary Caspers Nays: 0 – None Absent: 0 – Motion carried. d. Approval of Application for Membership in the Oak Brook Police Pension Fund of John M. Maton (hired September 27, 2016) e. Approval of Application for Membership in the Oak Brook Police Pension Fund of Michael M. Addison (hired March 22, 2017) Motion by Vice President Feldman, seconded by Secretary Caspers, to approve both of the above applications for membership. ROLL CALL: Ayes: 5-- Trustee Kadolph, President Torlo, Vice President Feldman, Secretary Caspers, Trustee Patel Nays: 0 – None Absent: 0 – Motion carried. 9. INFORMATION & UPDATES a. Scheduling of third quarterly meeting in July 2017 Consensus to meet on July 17th for the regular third quarterly meeting at 7:17 p.m. 10. ADJOURNMENT: Motion by Secretary Caspers, seconded by Trustee Patel, to adjourn the Board of Trustees of the Police Pension Fund meeting at 11:26 a.m. VOICE VOTE: Motion carried. ATTEST: Edward Caspers /s/ Edward Caspers, Secretary Board of Trustees of the Police Pension Fund BOARD OF TRUSTEES OF THE POLICE PENSION FUND Minutes Page 3 of 3 April 28, 2017