Loading...
HomeMy WebLinkAboutMinutes - 10/16/2018 - Police Pension Board Police Pension Board of Trustees October 16, 2018 Meeting Minute Call to Order A meeting of the City of McHenry Police Pension Board of Trustees was called to order at 2:35 pm in the McHenry City Council Chamber, 333 S. Green Street, McHenry, IL. Roll call: Members present: Jeffery Foerster, Nick Clesen, Jon Meyer, and Ormel Prust. 1-absent: Marc Fisher. Others present: Jim Schmidt, LPL Financial; Gary Karshna, Capital Gains, Inc. and Finance Director Lynch. There was a quorum present. Public Input None. Meeting Minutes: Motion to approve the July 10, 2018 meeting minutes. President Foerster asked if any of the members had any comments or questions with respect to the July 10, 2018 meeting minutes. The Members offered no comments. A Motion was made by Member Prust and seconded by Member Clesen to approve the July 10, 2018 meeting minutes as presented. Roll call: Vote: 4-ayes by unanimous voice vote. 0-nays, 0-abstained. Motion carried. Presentation of Actuarial Valuation Report as of May 1, 2018 and recommendation to forward the Pension Fund Tax Levy request to the full McHenry City Council President Foerster initiated a conference called between the Police Pension Board Members and Lauterbach and & Amen LLP representative Ms. Jessica Fain to discuss the Actuarial Valuation as of May 1, 2018. Ms. Fain discussed the contribution recommendation. She noted that the contribution recommendation has increased by $62,718 from the previous year. Ms. Fain continued on to report that the funded percentage has increased by 1.43% on an actuarial value of assets basis and the current valuation is 53.40% funded. Ms. Jessica discussed the actuarial contribution recommendation. Actuarial liability is expected to increase each year for both interest for the year and as active employees earn additional service years toward retirement. Similarly, actuarial liability is expected to decrease when the fund pays benefits to inactive employees. She reported that contributions are expected to increase as expected pay increases under the funding policy for the Fund. Taking into consideration the expected changes the contribution recommendation dollar amount is $60,591 and the initial expected current valuation amount is $2,080,294. Ms. Fain discussed other increases and decreases in actuarial liability. She reported that salary increase was greater than expected and contribution recommendation is $13,781. In addition, Demographic Data demonstrates a change in gains and losses which occurred over the one- year period as follows: New Hires: The fund added 1 new active member with a higher than average entry age. When a new member is admitted to the pension fund, the employer contribution will increase to reflect the new member. The increase in the recommend contribution in the current year for the new fund member is approximately $8,000. Retirement: There was 1 member of the fund who retired this year. When a fund member retires, the normal cost will decrease. The increase in the recommended contribution in the current year due to the retirement experience is approximately $2,000. Termination: There was 1 non-vested member of the fund who terminated employment during the year. The member did not take a refund. The fund is no longer obligated to pay a benefit to the member in the future. The decrease in the recommended contribution in the current year due to termination experience is approximately $6,000. Deferred Annuitants: There was 1 vested member of the fund who terminated employment during the year. The fund may be obligated to pay a benefit to the member in the future. The decrease in the recommended contribution in the current year due to the termination experience is approximately $42,000. Mortality: There is 1 surviving spouse who passed away during the year. When a surviving spouse passes away the fund liability decreases, as the pension fund no longer will make future payments to the surviving spouse. The net decrease in the recommended contribution in the current year due to the mortality experience is approximately $14,000. Ms. Fain continued on to report on the actuarial assumption utilized with respect to the return on investments which is estimated to be at 7% net of administrative expenses and the CPI-U is at a rate of 2.50% and the total pay increase assumption is at 3.00 %. The individual pay increases assumption is assumed at a rate between 4.00%-10.2%. Member Meyer commented on the total pay increase rate assumption. He recalled that last year the Pension Board recommended the individual pay assumption rate be assumed at a rate of 3.5%. A lengthy discussed ensued and at the conclusion of the conversation the Pension Board Member concurred that the individual pay increase assumption remain at 3.00%. A Motion was made by Member Meyer and seconded by Member Clesen to approve the individual pay assumption rate at 3.00%. Roll call: Vote: 4-ayes: Members: Prust, Meyer, Clesen and Foerster. 0-nays, 0- abstained. Motion carried. The Pension Board approved the final Actuarial Valuation Report as May 1, 2018. A Motion was made by Member Clesen and seconded by Member Meyer to forward the report and the Pension Board recommendation for the Police Pension Fund Tax Levy request to the full City Council. Roll call: Vote: 4- ayes: Members: Clesen, Meyer, Prust and Foerster. 0-nays, 0-abstained. Motion carried. President Foerster reported that he will draft a letter to send to the Mayor with the Police Pension Board’s recommendation and levy request. New Business: Motion to approve the purchase of service-time for unpaid leave for Officer Jill Foley President Foerster discussed a request the Police Pension Board had received from Officer Jill Foley to purchase 33 days of unpaid sick leave in the amount of $1,154.57. President Foerster reported that this type of request had been approved in the past. In addition, the terms will be set by the Actuarial including interest. The Police Pension Board Members were in favor of granting the request as long as the term did not exceed one year. A Motion was made by Member Clesen and seconded by Member Meyer to approve the purchase of service-time for unpaid leave for Officer Jill Foley. However, the term of repayment shall not exceed one year from the onset of the payroll deduction. Roll call: Vote: 4-ayes: Member Clesen, Member Meyer, Member Prust and Member Foerster. 0-nays, 0-abstained. Motion carried. Motion to accept the annual Independent Medical Examination for Police Disability Pensioner Justin DeBolt. President Foerster reported that he had received the independent medical examination report and recommends approval of accepting the report as presented. A Motion was made by Member Prust and seconded by Member Clesen to approve and accept the annual Independent Medical Examination for Police Disability Pensioner Justin DeBolt as presented. Roll call: Vote: 4-ayes: Member Prust, Member Clesen, Member Meyer and Member Foerster. 0-nays, 0-abstained. Motion carried. Motion to approve a request from former Officer Peter Nester for a refund of all pension fund contributions in the amount of $46,432.40. President Forrester reported that the refund of all pension fund contributions for Peter Nester is only the contributions he personally contributed to the fund. A Motion was made by Member Meyer and seconded by Member Prust to approve the request from former Officer Peter Nester for a refund of all pension fund contributions in the amount of $46,432.40. Roll call: Vote: 4-ayes: Member Meyer, Member Prust, Member Clesen and Member Foerster. 0-nays, 0- abstained Motion carried. Motion to approve Officer Megan Carey-Kiessel Application for Participation in the Police Pension Fund President Foerster recommends approval of Officer Megan Carey-Kiessel application for participation in the Police Pension Fund. A Motion was made by Member Clesen and seconded by Member Prust to approve Megan Carey- Kiessel application for participating in the Police Pension Fund. Roll call: Vote: 4- ayes: Member Clesen, Member Prust, Member Meyer and Member Foerster. 0-nays, 0-abstained. Motion carried. Report of Investments and Accounts: Presentation and Motion to approve the Treasurer’s Report A Motion was made by Member Meyer and seconded by Member Prust to approve the Treasurer’s Report as presented. Roll call: Vote: 4-ayes: Members Meyer, Member Prust, Member Clesen and Member Foerster. 0-nays, 0-abstained. Motion carried. LPL Financial Equities Report Mr. Karshna provided the Police Pension Board Members with the Financial Equities Report as of September 30, 2018. He reported that the short duration bond strategy is working as planned with respect to the current fiscal year and over the past twelve months. He will continue to monitor both the international and domestic economic events and the impact they may have on the financial markets and adjust the fixed income portfolio accordingly. Capital Gains, Inc. Fixed Assets Report Mr. Schmidt provided the Police Pension Board Members with an update on the Fixed Assets valuation thru the period of December 29, 2017-October 15, 2018. Mr. Schmidt reported in the short-term the various investments did not perform well over the course of this year. However, the loss is a paper loss and he will continue to monitor the markets. Semi-annual review of Police Pension Fund Investment Policy The Pension Board Member reviewed the current investment policy and recommended no changes at this time. Unfinished Business Motion to approve the payment of bills as follows:  Capital Gains –Invoice dated 7/10/2018 $4,999.00  Bankcard-Foerster-Invoice dated 8/10/2018 $375.00  Capital Gains-Invoice dated 9/24/2018 $5,039.00  Marsh bond-Invoice dated 9/24/2018 $50.00  March bond-Invoice dated 9/28/2018 $270.00  Foerster Conference Lunch 10/15/2018 $43.23  IPPFA Dues-Invoice dated 10/01/2018 $795.00 A Motion was made by Member Meyer and seconded by Member Clesen to approve the payment of bills as presented. Roll call: Vote: 4-ayes: Member Meyer, Member Clesen, Member Prust and Member Foerster. 0-nays, 0-abstained. Motion carried. Public Pension Trustee Training Updates The Pension Board Members successful completed their annual training. Their Certificates of Completion will be mailed and filed. Additional Items for Discussion There were no additional items discussed. Motion to Adjourn There being no further business to discuss, a Motion was made by Member Prust and seconded by Member Meyer to adjourn from the public meeting at 4:05 p.m. Roll call: Vote: 4-ayes by unanimous voice vote. 0-nays, 0-abstained. Motion carried. Respectfully submitted, Debra Meadows