HomeMy WebLinkAboutMinutes - 10/14/2014 - Police Pension BoardPolice Pension Board of Trustees
Regular Meeting
October 14, 2014
A meeting of the City of McHenry Police Pension Board of Trustees was called to order at 3:30 PM by
President Jeffrey Foerster. Other board members present: Jon Meyer and Ormel Prust. Absent: Marc Fisher and
Kelly Ducak.
Others present: Eric Snively, American Funds; Jim Schmidt, LPL Financial; Gary Karshna, Capital Gains, Inc.;
and Treasurer Carolyn Lynch and recording secretary Marci Geraghty, City of McHenry.
Public Input
None.
Approval of Minutes
President Foerster suggested the word "Rejected" in the last sentence on page two be changed to "Tabled" to
accurately reflect the board's action.
O. Prust made a motion, seconded by J. Meyer to approve meeting minutes from July 15, 2014 as amended and
to hold them for audit.
Ayes: Prust, Meyer Foerster
Absent: Ducak, Fisher
Abstain: None
Motion carried
Treasurer Report
C. Lynch presented the Treasurer Report for the period ending September 30, 2014. Full market value of cash
and investments at that time was $21,370,957.74; approximate increase of 1.0% over June 30, 2014 and 5.5%
increase over March 31, 2014.
The FY 14-15 Cash Analysis Report presented to the board calculates that approximately $100,000 will be
needed in cash to pay bills in May 2015. All but $40K in tax dollars has been received. The board agreed to
follow up on this matter at the April meeting.
Motion by J. Meyer, seconded by O. Prust to approve the Treasurer Report for the period ending September 30,
2014 as presented and to hold it for audit.
Ayes: Meyer, Prust, Foerster
Absent: Fisher, Ducak
Abstain: None
Motion carried
Approval of Bills.
The following bills were presented for approval:
I.-.
Capital Gains, Inc.: $5,053
Tim Sharpe Actuary: $2,100
Board Attorney Richard Puchalski: $50
Motion by O. Prust, seconded by J. Meyer to approve payment of bills as presented.
Ayes: Prust, Meyer, Foerster
Absent: Fisher, Ducak
Abstain: None
Motion carried
Approval to transfer creditable service from former Police Officer Derek Kay totaling $112,515 from McHenry
Police Pension Fund to Gurnee Police Pension Fund.
President Foerster reported actuary Tim Sharpe calculated the total required transfer amount.
Motion by J. Meyer, seconded by O. Prust to approve the transfer of creditable service totaling $112,515 to
Gurnee Police Pension Fund as presented.
Ayes: Meyer, Prust, Foerster
Absent: Fisher, Ducak
Abstain: None
Motion carried
Approval of application to Police Pension Fund submitted by Samuel M. Schafer.
President Foerster reported Samuel M. Schafer was sworn in on September 22" d, and has met all requirements
for application to the Police Pension Fund.
Motion by O. Prust, seconded by J. Meyer to approve the application to the Police Pension Fund submitted by
Samuel M. Schafer as presented.
Ayes: Prust, Meyer, Foerster
Absent: Fisher, Ducak
Abstain: None
Motion carried
Approval to accept medical report and continue disability pension for former officer Daniel Kin&
Motion by J. Meyer, seconded by Ormel Prust to continue the disability pension for former officer Daniel King
as presented.
Ayes: Meyer, Prust, Foerster
Absent: Fisher, Ducak
Abstain: None
Motion carried
Investment Reports
a) Capital Gains, Inc.: Gary Karshna of Capital Gains, Inc. presented the fixed assets report for the period
ending September 30, 2014. The strategy continues to be to purchase short term corporate bonds and
muni's as these instruments are the best value at this time. The portfolio market value as of September
30`h was $9,192,310 and book valuation was $9,231,152.
2
b) LPL Financial: Jim Schmidt of LPL Financial presented the equities report. Total market value of
equities as of September 30"' was $11,333,938.78. The IRR has increased 4.02% from December 2013
to September 2014.
`.- Mr. Eric Snively representing American Funds presented the board with an update on American Funds
investment strategy and long term views. He noted it would be wise for the pension fund to take
advantage of emerging global consumers and invest in "New World Fund." Mr. Schmidt recommended
liquidating IVY Assets and purchasing a 5% position in the New World Fund. He explained three years
ago, IVY Assets was put into place to diversify the equity investments however it has performed slowly.
Approximately $1,300,000 would be allocated as follows: AMCAP, $175K; Small Cap World:
$187,500; Washington Mutual $200K; Capital World Gr. & Inc., $187.5K and New World Fund,
$550K.
J. Meyer made a motion, seconded by O. Prust to liquidate the IVY Assets Fund and reallocate
approximately $1.3M as presented.
Ayes: Meyer, Prust, Foerster
Absent: Fisher, Ducak
Abstain: None
Motion carried
c) Semi -Annual Review of Police Pension Fund Investment Policy
No changes were suggested.
At 4:20 PM, Mr. Snively from American Funds left the meeting.
Approval of Actuarial Valuation Report for May 1 2014 to April 30 2015 and recommendation to forward tax
�- levy request to McHeM City Council.
President Foerster stated the actuary report presented recommends a $92K increase in the tax levy and asked for
comments and/or questions. Trustee Meyer commented that a statement made by the actuary should be included
in the report that substantiates the need to increase the levy. Trustee Meyer is concerned with using 7.50%
interest rate, 3.0% COLA, and 5.50% salary scale to make the assumptions and is of the opinion 7.5% and 5.5%
assumptions should be adjusted down. President Foerster reported the patrol officers have a three year union
contract that calls for a 3.20% increase; this is the last year of the contract. A discussion ensued on the need to
review projected pension payments based on age and service of plan participants. Currently, of the 46 plan
participants the average age is 36.5 and the average years of service is 10.7.
J. Meyer made a motion, seconded by O. Prust to approve the Police Pension Fund Actuarial Valuation Report
from 5/1/14 through 4/30/15 as presented and forward pension fund tax levy request to the McHenry City
Council.
Ayes: Meyer, Prust, Foerster
Absent: Fisher, Ducak
Abstain: None
Motion carried
Proposed Amendments to Administrative Rules Part 10
President Foerster reported updates to Part 10 Section (a) and (c) are recommended to conform to state statutes
regarding trustee education specifically 16 hours of continuing trustee education not 8 as published in the
current document. Also it is recommended to include the 32-hour certification requirement for new trustees.
`.. Section (c) should be amended to reflect the time frame to complete the ethics training is August 13"' through
August 12 of the next corresponding year, not April 30`h to May 1" as published in the current document.
OWA
J. Meyer made a motion, seconded by O. Prust to approve amendments to Administrative Rules Part 10 Sections
(a) and (c) as presented.
Ayes: Meyer, Prust, Foerster
Absent: Fisher, Ducak
Abstain: None
Motion carried
Public Pension Trustee Training Update.
A discussion ensued on the new training scheduled from IPPFA. Information from the IPFA was provided to
the board. Trustee Meyer expressed interest in attending the IPFA 2014 Fall Pension Seminar on November 7th
in Elmhurst, IL.
2015 Pension Board of Trustees Meeting Schedule.
O. Prust made a motion, seconded by J. Meyer to approve the 2015 Pension Board of Trustees meeting schedule
as presented: January 13, April 14, July 14, and October 13. All meetings will begin at 3:30 PM in the City of
McHenry Municipal Center.
Ayes:
Absent:
Abstain:
Motion carried
Adjournment
Prust, Meyer, Foerster
Fisher, Ducak
None
O. Prust made a motion, seconded by J. Meyer to adjourn the meeting.
Ayes: Prust, Meyer, Foerster
Absent: Fisher, Ducak
Abstain: None
Motion carried.
The meeting was adjourned at 4:45 PM.
Respectfully submitted,
Marci Geraghty, Reccfing Se retary
11