HomeMy WebLinkAboutMinutes - 10/25/2018 - Police Pension Fund BoardBOARD OF TRUSTEES OF THE POLICE PENSION FUND
Minutes Page 1 of 5 October 25, 2018
VILLAGE OF OAK BROOK
BOARD OF TRUSTEES OF THE POLICE PENSION FUND - Minutes
October 25, 2018
UNOFFICIAL UNTIL APPROVED AS WRITTEN √
OR AS AMENDED BY BOARD OF TRUSTEES OF THE
POLICE PENSION FUND ON January 22, 2018
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 7:02 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.
2. ROLL CALL
The roll was called with the following persons
PRESENT: President Vel Torlo, Vice President Alan Feldman, Secretary Ed Caspers, Trustee Ben
Kadolph, Trustee Hitesh Patel
ABSENT: None
IN ATTENDANCE: Phil Kosmala and Zach Pearsall of Taiber, Kosmala, Spencer Klein and Frank
Fanelli of MB Financial, Derek Flessner of Lauterbach & Amen, Pension Clerk Rose Kane
3. PUBLIC COMMENTS None presented.
4. APPROVAL OF MINUTES
a. Approval of Regular Meeting Minutes of July 19, 2018
Motion by Secretary Caspers, seconded by Trustee Kadolph, to approve the Meeting Minutes
of the July 19, 2018 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 expenditures for month ended July 31, 2018 in the amount of $230,659.51
b. Approval of expenditures for month ended August 31, 2018 in the amount of $236,672.04
c. Approval of Taiber Kosmala first, second and third quarter invoices in the total amount of
$21,000.00
d. Approval of Department of Insurance Compliance Fee invoice in the amount of $6,709.21
payable to the Illinois State Treasurer
e. Approval of Mesirow Insurance Services, Inc. renewal business premium in the amount of
$4,126.00
f. Approval of Lauterbach & Amen, LLP invoices for professional services regarding FYE17
1099s, January, February, March, May and June 2018 Accounting Service fees in the total
amount of $6,660.00
g. Approval of reimbursement to Village for share of FYE17 Audit in the total amount of
$2,130.00
h. Approval of Pension Clerk Kane timesheet in the total amount of $343.75 for services
rendered January through May 2018
i. Approval of Illinois Professional Firefighter Association seminar registration fee in the amount
of $180.00
j. Approval of Illinois Public Pension Fund Association conference registration fees in the
amount of $750.00
k. Approval of INSPE Associates, Ltd. Invoice in th e amount of $2,550.00
BOARD OF TRUSTEES OF THE POLICE PENSION FUND
Minutes Page 2 of 5 October 25, 2018
l. Approval of Reimer, Dobrovolny, PC invoices in the total amount of $5,141.78 for legal
services rendered in February, March, April and May 2018
m. Approval of Illinois Association of Chiefs of Police invoice for training in the amount of
$198.00
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 – None
Motion carried.
6. ITEMS REMOVED FROM CONSENT AGENDA – None presented.
7. UNFINISHED BUSINESS
a. Ratification of Administrative Rules
Motion by Secretary Caspers, seconded by Trustee Kadolph, to ratify the Administrative Rules.
ROLL CALL:
Ayes: 5 –Secretary Caspers, Trustee Patel, Trustee Kadolph, President Torlo, Vice
President Feldman,
Nays: 0 – None
Absent: 0 – None
Motion carried.
8. NEW BUSINESS
a. Taiber Kosmala and Associates, LLC Report on Third Quarter, 2018
Mr. Kosmala began his discussion on page 2 of the Taiber Kosmala report for the Third Quarter 2018 and
commented on the overall economic backdrop and global financial markets. He stated that the third quarter
continued the trend of the previous two quarters, strong economic growth domestically in contrast to
diverging and slowing growth overseas. He discussed the key takeaways for the quarter:
Third quarter GDP read at 3.5% following the final tally of 4.2% for the second quarter.
Global monetary policy has begun its natural shift to removing accommodation through
balance sheet reduction and gradual rate increases. The Fed Funds rate is
currently 2.25%, however FOMC member rhetoric has turned hawkish as inflation
expectations rise due to the strong labor market (headline unemployment read 3.7%, a 50-
year low). The more hawkish tone and trade fears spurred a 5% correction in early October.
Despite inflation reading near the Fed’s target of 2%, monetary policy still remains
accommodative with real interest rates remaining negative.
Mr. Kosmala concluded that, the three key pillars of support for risk assets remained intact: corporate
earnings, U.S. economic backdrop, and supportive policy (monetary and fiscal). He stated that this
foundation produced strong returns for U.S. risk assets while high quality fixed income and non-U.S. assets
faced headwinds. He added that geopolitics (especially trade), tighter monetary conditions, and global
economic slowdown are all material considerations looking forward for the OBPP portfolios.
BOARD OF TRUSTEES OF THE POLICE PENSION FUND
Minutes Page 3 of 5 October 25, 2018
Mr. Kosmala stated that from quarter end to October 25th, market volatility spiked and equities declined
near 7%. He noted the October decline mirrors the drawdown markets experienced in January (down 10%
in 10 trading days only to rally 16% through the end of the quarter); trades fears, fear of the Fed tightening
too aggressively, and geopolitical turmoil are dominating headlines and negatively driving near term
performance in contrast to the fundamentally strong US economy. Mr. Kosmala did not recommend any
changes to the portfolio at this time.
Mr. Kosmala then commented on portfolio performance for the quarter, discussing that the portfolio
performed well during the quarter as markets rebounded from the late January trade fear induced sell off.
For the quarter:
The portfolio increased 2.5% with performance driven primarily by an overweight
allocation to equities.
The equity portion of the portfolio returned 3.9% in contrast to global markets up 4.4%.
US equities outperformed non-US equities, the portfolio benefited from the domestic tilt.
The US large cap portion returned 7% but lagged the S&P 500 slightly.
Non-US equities declined (-2.0%) relative to the MSCI EAFE which logged 1.42% during
the same period.
Non-US equity performance as most notably hindered by Emerging Market exposure.
Fixed income securities returned 0.45% relative to their designated benchmark that was
flat for the quarter.
REITs were slightly positive over the same period.
Through September 30, the OBPP’s investment portfolio gained 3.05% (year to date)
relative to the policy benchmark return of 3.19%.
Oak Brook Pension Performance
On page 6 of the Taiber, Kosmala Report, the portfolio activity was listed as follows:
b. MB Financial Investment Management Performance Report on Third Quarter, 2018
Mr. Fanelli confirmed the authorized signers for the Fund and requested contact information for the Board
members.
Mr. Klein referred to page 15 of the MB report and discussed the portfolio composition.
MARKET VALUE % OF TOTAL TARGET
TOTAL FUND $12,057,495 100.00 100.00
FIXED INCOME $11,951,990 99.12 99.00
CASH & EQUIV. $105,507 0.88 1.00
Mr. Klein discussed the 12-month Outlook for equity returns on page 11 of the MB report. He stated that
the only way for police and fire pension funds to feel confident to hit the actuarial return numbers is to have
4 or 5% less than the maximum that the Department of insurance allows in stocks.
c. Approval of Investment Transactions for Third Quarter, 2018
Motion by Trustee Patel, seconded by Secretary Caspers, to approve the Investment
Transactions for Third Quarter, 2018.
Summary of Cash Flows
Beginning Market Value $ 37,598,924
Net Cash Flow ($364,603)
Net Investment Change $ 927,233
Ending Market Value on 3/31/18 $ 38,161,554
BOARD OF TRUSTEES OF THE POLICE PENSION FUND
Minutes Page 4 of 5 October 25, 2018
ROLL CALL:
Ayes: 5 – Trustee Patel, Trustee Kadolph, President Torlo, Vice President Feldman,
Secretary Caspers,
Nays: 0 – None
Absent: 0 – None
Motion carried.
d. Approval of the Municipal Compliance Report for FYE2017
Mr. Flessner summarized the Municipal Compliance Report. He affirmed that the recommended
municipal contribution is $1,774,269.
Motion by Trustee Kadolph, seconded by Secretary Caspers, to approve the Municipal
Compliance Report. VOICE VOTE: Motion carried.
e. Approval of Application for Membership in the Oak Brook Police Pension Fund of Genita Benson
(hired May 3, 2018)
f. Approval of Application for Membership in the Oak Brook Police Pension Fund of Steven Dinov
(hired May 3, 2018)
g. Approval of Application for Membership in the Oak Brook Police Pension Fund of Jeffrey Marek
(hired August 16, 2018)
h. Approval of Application for Membership in the Oak Brook Police Pension Fund of Joshua Reid
(hired August 16, 2018)
i. Approval of Application for Membership in the Oak Brook Police Pension Fund of Susannah
Gilberti (hired September 17, 2018)
Motion by Secretary Caspers, seconded by Trustee Patel, to approve the membership
applications of: Genita Benson, Steven Dinov, Jeffrey Marek, Joshua Reid, Susannah Gilberti.
VOICE VOTE: Motion carried.
Mr. Klein remarked that the merger between MB Financial and Fifth Third Bank is expected to close
sometime in the first quarter of 2019.
Mr. Klein and Mr. Fanelli exited the meeting at approximately 7:34 p.m.
9. PENDING BUSINESS
a. Discussion regarding disability matter
Pension Clerk Kane discussed a contact by a reporter and a Freedom of Information Act request regarding
the disciplinary action against former Board Actuary Timothy Sharpe. It was affirmed that no formal
complaint was made to the disciplinary commission by the Board or Lauterbach and Amen. Discussion
ensued regarding why a change was made in actuaries.
Discussion regarding recent developments in the disability matter. It was suggested that Attorney Reimer
contact the applicant’s attorney to obtain a good estimate as to when the Board can receive a summary of
records and set up a special meeting for a hearing between now and December. Consensus to hold off
until the new records have been examined and reports have been provided to the Board. Trustee Kadolph
agreed to contact Attorney Reimer regarding a special meeting and a summary of the Board’s discussion.
BOARD OF TRUSTEES OF THE POLICE PENSION FUND
Minutes Page 5 of 5 October 25, 2018
10. INFORMATION & UPDATES
a. Scheduling of first quarterly meeting in 2019
Consensus to meet on January 22, 2019 at 7:00 p.m.
11. ADJOURNMENT
Motion by Secretary Caspers, seconded by Vice President Feldman, to adjourn the Board of
Trustees of the Police Pension Fund meeting at 8:02 p.m. VOICE VOTE: Motion carried.
ATTEST:
Edward J. Caspers /s/
Edward J. Caspers, Secretary
Board of Trustees of the Police Pension Fund